Which of the Following Losses Are Generally Deductible

question 31

Multiple Choice

Which of the following losses are generally deductible?
I.Loss on the sale of a personal residence.
II.Loss due to the theft of business inventory.
​

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

---

Definitions:

Sales Agreement

A legal document that outlines the terms and conditions of a transaction between a buyer and a seller for goods or services.

Sales Revenue Approach

A method used in accounting to calculate revenue based on the total value of goods or services sold.

Bad Debts Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect, thus written off as a loss.

Uncollectible Accounts

Refers to receivables that a company has deemed unrecoverable and is unlikely to collect.