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TEST BANK for McGraw-Hill's Taxation of Business Entities 2023 Edition, 15th Edition ISBN13: 9781265622008 By Spilker, Ayers, Barrick, Lewis and Robinson$17.49
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McGraw-Hill\'s Taxation Of Business Entities 2023 E
McGraw-Hill\'s Taxation of Business Entities 2023 E
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TEST BANK for McGraw-Hill's Taxation of Business Entities 2023 Edition, 15th Edition ISBN13: 9781265622008 By Spilker, Ayers, Barrick, Lewis and Robinson
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McGraw-Hill\'s Taxation of Business Entities 2023 E
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McGraw-Hill\'s Taxation Of Business Entities 2023 E
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ISE McGraw-Hill\'s Taxation of Individuals and Business Entities 2023 Edition
TEST BANK for McGraw-Hill's Taxation of Business Entities 2023 Edition, 15th Edition ISBN13: 9781265622008 By Spilker, Ayers, Barrick, Lewis and Robinson
TEST BANK for McGraw-Hill's Taxation of Business Entities 2023 Edition, 14th Edition ISBN13: 9781265622008 By Spilker, Ayers, Barrick, Lewis and Robinson
Taxation of Individuals and Business Entities 2023 Test Bank Answers Ch 1
Taxation of Individuals and Business Entities 2023 Test Bank Answers Ch 2
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TEST BANK for McGraw-Hill's Taxation of Business Entities 2023 Edition, 15th Edition By Spilker, Ayers,
Barrick, Lewis and Robinson
TEST BANK for McGraw-Hill's Taxation of Business Entities
2023 Edition, 15th Edition By Spilker, Ayers, Barrick, Lewis and
Robinson
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) The Internal Revenue Code authorizes deductions for trade or business activities if the expenditure is
"ordinary and necessary."
⊚ true
⊚ false
2) Business activities are distinguished from personal activities in that business activities are motivated
by the pursuit of profits.
⊚ true
⊚ false
3) The phrase "ordinary and necessary" has been defined to mean that an expense must be essential and
indispensable to the conduct of a business.
⊚ true
⊚ false
4) Reasonable in amount means that expenditures can be exorbitant if the activity is motivated by profit.
⊚ true
⊚ false
5) The test for whether an expenditure is reasonable in amount is whether the expenditure was for an
"arm's length" amount.
⊚ true
⊚ false
Test Bank / Solution Page 1
, TEST BANK for McGraw-Hill's Taxation of Business Entities 2023 Edition, 15th Edition By Spilker, Ayers,
Barrick, Lewis and Robinson
6) Illegal bribes and kickbacks are not deductible business expenses, but fines imposed by a
governmental unit are deductible as long as the fines are incurred in the ordinary course of business.
⊚ true
⊚ false
7) Although expenses associated with illegal activities are not deductible, political contributions can be
deducted if the donation is not made to a candidate for public office.
⊚ true
⊚ false
8) When a taxpayer borrows money and invests the loan proceeds in municipal bonds, the interest paid
by the taxpayer on the debt will not be deductible.
⊚ true
⊚ false
9) A business can deduct the cost of uniforms supplied to employees if the uniforms are not suitable for
normal wear.
⊚ true
⊚ false
10) Only half the cost of a business meal is deductible even if the meal is extravagant.
⊚ true
⊚ false
11) Taxpayers must maintain written contemporaneous records of business purpose when traveling to
claim a deduction for the expenditures.
⊚ true
⊚ false
Test Bank / Solution Page 2
, TEST BANK for McGraw-Hill's Taxation of Business Entities 2023 Edition, 15th Edition By Spilker, Ayers,
Barrick, Lewis and Robinson
12) Ralph borrowed $4 million and used the proceeds in his Internet business. The interest on this debt is
not subject to an interest limitation if Ralph's business has average annual gross receipts of $29 million
or less for the prior three taxable years.
⊚ true
⊚ false
13) Adjusted taxable income for calculating the business interest limitation is defined as taxable income of
the taxpayer computed without regard to any item of income, gain, deduction, or loss that is not
properly allocable to the trade or business.
⊚ true
⊚ false
14) The deduction for business interest expense is limited to the sum of
1. business interest income and
2. 30 percent of the adjusted taxable income of the taxpayer for the taxable year.
⊚ true
⊚ false
15) Adjusted taxable income is computed after the deduction for qualified business income defined under
Section 199A but without regard to any NO deduction.
⊚ true
⊚ false
16) A loss deduction from a casualty of a business asset is only available if the asset is completely
destroyed.
⊚ true
⊚ false
17) All taxpayers must account for taxable income using a calendar year.
⊚ true
⊚ false
Test Bank / Solution Page 3
, TEST BANK for McGraw-Hill's Taxation of Business Entities 2023 Edition, 15th Edition By Spilker, Ayers,
Barrick, Lewis and Robinson
18) A short tax year can end on any day of any month other than December.
⊚ true
⊚ false
19) A fiscal tax year can end on the last day of any month other than December.
⊚ true
⊚ false
20) A business generally adopts a fiscal or calendar year by using that year-end on the first tax return for
the business.
⊚ true
⊚ false
21) Sole proprietorships must use the same tax year as the proprietor of the business.
⊚ true
⊚ false
22) Even a cash-method taxpayer must consistently use accounting methods that "clearly reflect income"
for tax purposes.
⊚ true
⊚ false
23) The 12-month rule allows taxpayers to deduct the entire amount of certain prepaid business expenses.
⊚ true
⊚ false
24) The all-events test for income determines the period in which income will be recognized for tax
purposes.
⊚ true
⊚ false
Test Bank / Solution Page 4
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