Generally, Deductions for Additions to Reserves for Estimated Future Costs

question 60

Multiple Choice

Generally, deductions for additions to reserves for estimated future costs (e.g., an allowance for estimated warranty costs) are not allowed for Federal income tax purposes because allowing the deduction would:

• A)Result in a mismatching of revenues and expenses.
• B)Violate established public policy.
• C)Violate the economic performance requirement.
• D)Violate the tax benefit rule.
• E)None of the above.

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Definitions:

Hypnotic Age Regression

A therapeutic technique in which a person is guided to recall and sometimes re-experience events from their past while under hypnosis.

Retrieval Cue

A stimulus that allows for the recall of information stored in memory, facilitating access to particular pieces of information.

Mnemonic Device

A tool that aids in remembering information, often using patterns of letters, ideas, or associations.

Eidetic Image

A mental image that is unusually vivid and detailed, as if the person is actually seeing it in front of them.