Which of the Following Is Correct

question 107

Multiple Choice

Which of the following is correct?

• A)A personal casualty loss is classified as a deduction from AGI.
• B)Real estate taxes on a taxpayer's personal residence are classified as deductions from AGI.
• C)An expense associated with rental property is classified as a deduction from AGI.
• D)Only a.and b.are correct.
• E)a., b., and c., are correct.

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Definitions:

Deferral

Recognition of revenue or expenses in a period different from when the transaction actually occurred, usually related to prepaid expenses or unearned revenue.

Recognition

Recognition in accounting refers to the formal acknowledgment of a transaction or event in the financial statements, often involving the recording of revenue or expense.

Expense

Costs incurred by a business in the process of earning revenues.

Deferral Adjusting Entry

An accounting entry made to defer revenue or expense to a future period.