Swan,IncIs an Accrual Basis Taxpayer

question 10

Multiple Choice

Swan,Inc.is an accrual basis taxpayer.Swan uses the aging approach to calculate the reserve for bad debts.During 2010,the following occur associated with bad debts. The amount of the deduction for bad debt expense for Swan for 2010 is:

• A)$10,000.
• B)$12,000.
• C)$20,000.
• D)$22,000.
• E)None of the above.

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Definitions:

Balance Per Books

The amount shown in a company's accounting records, as opposed to the actual cash balance or balance reported by a bank.

Cash Disbursement Transactions

Financial activities involving the payment of cash from a business to vendors, employees, or other entities.

Authorized

Refers to having official permission or approval, often in the context of legal or financial operations that have been ratified or sanctioned by a governing body or higher authority.