Match Each Statement with the Correct Term Below

question 133

Multiple Choice

Match each statement with the correct term below.
-Reasonable Expense

• A)Specifically disallowed.
• B)Appropriate and helpful.
• C)Considered a trade or business.
• D)Not considered a trade or business.
• E)Problems with this generally arise with related parties.
• F)This is met when services or property are provided to the taxpayer.
• G)Normal, common, and accepted but not necessarily regularly recurring.
• H)This is met when the existence and the amount of a liability have been established.

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Definitions:

Sales Adjusted

Adjustments made to recorded sales figures for returns, allowances, or discounts to determine the actual net sales amount.

Cash Basis

An accounting method recognizing revenues and expenses when cash is actually received or paid out, rather than when earned or incurred.

Selling and Administrative Expense

Expenses related to the selling of products and the management of the business, not directly tied to production.

Statement of Cash Flows

A financial report that summarizes the amount of cash and cash equivalents entering and leaving a company.