The Cohan rule has to do with: 1) Tax accounting methods 2) Debts of another taxpayer 3) Substantiation of deductions O4) Cash method of accounting
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- The definition of gross income in the tax law is: All items specifically listed as income in the tax law All cash payments received for goods provided and services performed All income from whatever source derived All income from whatever source derived unless the income is earned illegallyWhich of the following is an acceptable method of accounting under the tax law? The accrual method The hybrid method The cash method All of the above are acceptable None of the aboveWhich of the following statements accurately describes the impact of accounting for bad debts on taxes? A) Accounting for bad debts increases taxable income in the period they are recognized. B) Accounting for bad debts decreases taxable income in the period they are recognized. C Accounting for bad debts has no impact on taxable income. D) Accounting for bad debts defers taxable income to future periods.
- Which of the following statements is false? In order to claim a bad debt deduction: a. There must be an existing debt. b. The debt must be written-off. c. The taxpayer must be in the business of money-lending. d. The debt must be bad.Which of the following statements is false? Group of answer choices A.Prepaid expenses are fully deductible when paid for a cash basis taxpayer. B.Reasonableness is most often considered in the context of compensation. C.Inventory can not be deducted when paid. D.You are considered to have paid at the date you pay with a credit card, even though you still owe the bank.f a business owner paid for the business expenses with their personal account, and those expenses would otherwise be deductible, they: A. CANNOT be deducted on the tax return because they weren't paid for from a business account. B. CAN be included on the tax return as long as proof of the expenses is sent with the return. C. CAN be deducted on the tax return. D. CANNOT be deducted because the IRS requires separate business and personal bank accounts.
- Some items are treated as a deduction for tax purposes when they are paid but are recognised as expenses when they are accrued for accounting purposes. Which of the following items are of that type? a. Warranty costs b. Goodwill impairment c. Fines d. Entertainment expenses e. Prepaid insuranceA company has only one deductible temporary difference due to the use of the current expected credit loss method (CECL) of recognizing credit losses (ie, bad debts) for financial reporting purposes. The company is trying to determine how the resulting deferred tax asset will be reported on the balance sheet. Which section of the authoritative literature describes whether deferred tax assets and liabilities are classified as current or noncurrent? Enter your response in the answer fields below. Unless specifically requested, your response should not cite implementation guidance. Guidance on correctly structuring your response appears above and below the answer fields. Type the topic here. Correctly formatted FASB ASC topics are 3 digits. FASB ASCWhich of the following statements is true regarding the calculation of a C corporation's taxable income and tax liability? A. Business bad debts are allowed as an ordinary business deduction if the direct write-off method is used. B. Charitable contributions are considered a special deduction rather than part of ordinary business deductions. C. The foreign tax credit is applied to taxable income before multiplying by the tax rate to determine gross tax liability. D. The dividends received deduction is used to determine income before NOL and special deductions. 2. As the result of an IRS audit of a C corporation and its sole shareholder, the IRS agent proposes that a portion of the shareholder's salary is unreasonable. Because the corporation has significant earnings and profits, the agent has determined that the unreasonable portion of the salary is a dividend. Which of the following is correct regarding the impact of the proposed adjustment to both the…
- 8. The amounts charged to income for bad debts on accounts receivable will generally be the same for both tax and accounting purposes True or False? 9 A self employed individual cannot deduct CCA on a home office in his principal residence unless it is used exclavely for income producing purposes. True or False?1. When a business ceases to operate and its inventories are disposed of a gain on the inventories will be treated as a capital gain unless an election is made by the selling taxpayer True or False 2. When a business ceases to operate and its accounts receivable are disposed of with the other business assets any loss on the receivables will be treated as a capital loss unless a joint election is made by the purchaser and seller. True or FalsePLEASE ANSWER ALL QUESTIONS IN BOTH 1 AND 2 PLEASE. 1. Some accountants believe that deferred taxes should not be recognized for certain temporary differences. What is the conceptual basis for this argument? 2.What events create permanent differences between accounting income and taxable income? What effect do these events have on the determination of income taxes payable and deferred income taxes? Identify three examples of permanent differences between accounting income and taxable income.