Under the Terms of a Divorce Agreement Entered into in 2017

question 50

Multiple Choice

Under the terms of a divorce agreement entered into in 2017, Lanny was to pay his wife Joyce $2,000 per month in alimony and $500 per month in child support. For a twelve-month period, Lanny can deduct from gross income (and Joyce must include in gross income) :

• A) $0.
• B) $6,000.
• C) $24,000.
• D) $30,000.
• E) None of these.

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Definitions:

One Quarter

A term referring to one-fourth of a year, used in financial and business contexts to divide the fiscal or calendar year into four periods for reporting purposes.

One Year

A period consisting of 12 consecutive months.

Unearned Revenue

An accounting term referring to money received for a product or service yet to be delivered or performed.

Customers Pay

This term refers to the action of clients or buyers giving money in exchange for goods or services.