Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Question
Chapter 9, Problem 4CPA
To determine
Determine the itemized deduction for moving expense.
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Give an example of situation to show how a business adheres to each of the following accounting principles:
Historical cost
Revenue recognition
An accountant must be familiar with the concepts involved in determining earnings of a business entity. The amount of earnings reported for a business entity is dependent on the proper recognition, in general, of revenues and expenses for a given time period. In some situations, costs are recognized as expenses at the time of product sale. In other situations, guidelines have been developed for recognizing costs as expenses or losses by other criteria.
Instructions
a. Explain the rationale for recognizing costs as expenses at the time of product sale.
b. What is the rationale underlying the appropriateness of treating costs as expenses of a period instead of assigning the costs to an asset? Explain.
c. In what general circumstances would it be appropriate to treat a cost as an asset instead of as an expense? Explain.
d. Some expenses are assigned to specific accounting periods on the basis of systematic and rational allocation of asset cost. Explain the underlying rationale…
Income reported for a business entity depends on the proper recognition of revenues and expenses. In certain cases, costs are recognised as expenses at the time of product sale and in other situations costs are capitalised if they bring future benefits.In around 250 words, comment on the above statement. Your comments should include valid examples and illustrations.
Chapter 9 Solutions
Individual Income Taxes
Ch. 9 - Prob. 1DQCh. 9 - Mason performs services for Isabella. In...Ch. 9 - Milton is a resident of Mobile (Alabama) and is...Ch. 9 - In 2017, Emma purchased an automobile, which she...Ch. 9 - Prob. 5DQCh. 9 - Prob. 6DQCh. 9 - Prob. 7DQCh. 9 - Prob. 8DQCh. 9 - Prob. 9DQCh. 9 - Prob. 10DQ
Ch. 9 - Prob. 11DQCh. 9 - Prob. 12DQCh. 9 - Prob. 13DQCh. 9 - Prob. 14DQCh. 9 - Paul wholly owns and operates an office supplies...Ch. 9 - Prob. 16DQCh. 9 - Prob. 17DQCh. 9 - Lara uses the standard mileage method for...Ch. 9 - Fred, a self-employed taxpayer, travels from...Ch. 9 - Prob. 20CECh. 9 - Prob. 21CECh. 9 - In 2019, Robert entertains four key clients and...Ch. 9 - In 2019, the CEO of Crimson, Inc., entertains...Ch. 9 - Prob. 24CECh. 9 - Cindy maintains an office in her home that...Ch. 9 - Prob. 26CECh. 9 - Prob. 27CECh. 9 - Prob. 28PCh. 9 - Prob. 29PCh. 9 - Prob. 30PCh. 9 - In June of this year, Dr. and Mrs. Bret Spencer...Ch. 9 - Prob. 32PCh. 9 - On Thursday, Justin flies from Baltimore (where...Ch. 9 - Monica, a self-employed taxpayer, travels from her...Ch. 9 - Prob. 35PCh. 9 - Prob. 36PCh. 9 - Prob. 37PCh. 9 - Prob. 38PCh. 9 - Prob. 39PCh. 9 - Prob. 40PCh. 9 - Shelly has 200,000 of QBI from her local jewelry...Ch. 9 - Prob. 42PCh. 9 - Prob. 43PCh. 9 - Prob. 44PCh. 9 - Prob. 45PCh. 9 - Prob. 46PCh. 9 - Ben and Molly are married and will file jointly....Ch. 9 - Prob. 48PCh. 9 - Prob. 49PCh. 9 - Prob. 50PCh. 9 - David R. and Ella M. Cole (ages 39 and 38,...Ch. 9 - Addison Parker (Social Security number...Ch. 9 - In the current year, Barlow moved from Chicago to...Ch. 9 - Prob. 2CPACh. 9 - Prob. 3CPACh. 9 - Prob. 4CPACh. 9 - Prob. 5CPACh. 9 - Prob. 6CPACh. 9 - Calculate the taxpayers 2019 qualifying business...Ch. 9 - Prob. 8CPA
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Similar questions
- Which of the following is the principle that a business must report any business activities that could affect what is reported on the financial statements? A. revenue recognition principle B. expense recognition (matching) principle C. cost principle D. full disclosure principlearrow_forwardThe adjusting entry for unearned revenue pertains to which of the following types of businesses? a. Service b. Merchandising c. Manufacturing d. Service and merchandising e. All of the abovearrow_forward18) If any revenues and expenses which are not related to the sale of products or services regularly offered by the business, it is termed as ___________________. a. Administration expenses b. Other revenues and expenses c. Operating expenses d. Selling expensesarrow_forward
- Which of the following is treated as business expense? a. Installation cost of business equipment b. Freight-in c. Insurance while the goods are in transit to the taxpayer d. Freight-outarrow_forwardWhat are business transactions called that increase owner’s equity as a result of providing a services or selling products to customers? Group of answer choices revenue expense liability assetarrow_forwardAccounting provides information on (A) Cost and income for managers (B) Company’s tax liability for a particular year (C) Financial conditions of an institution (D) All of the abovearrow_forward
- Indicate whether the following financial statement items apply to a manufacturer, a merchandiser, or aservice provider. Some items apply to more than one type of organization. Operating expensesarrow_forwardWhen choosing between the ‘nature’ and ‘function’ of expenses in the presentation of its statement of comprehensive income, a company should: A. select the method that results in the lowest income. B. select the method that is easiest to implement. C. select the method that best reflects the nature of its business. D. select the method that results in the highest income.arrow_forwardUsing the following categories, discuss the differences that exist between accounting for these items in a personal context versus for a business. Specifically provide examples of the difference in account names or terms used to describe the equivalent item when related to accounting for a business. 1. Assets & LIabilities 2. Net Worth 3. Surplus(deficit)arrow_forward
- Many accounting professionals work in one of the following three areas.A. Financial accounting B. Managerial accounting C. Tax accountingIdentify the area of accounting that is most involved in each of the following responsibilities. Enforcing tax lawsarrow_forwardDefine each service rendered Financial accounting service rendered Managerial accounting service rendered Cost accounting service rendered Auditing tax service rendered Fiduciary accounting service rendered Project accounting services renderedarrow_forwardWhich of the following accounting concepts considers the investment made by the owner in the business as the liability of the business? a.Dual aspect concept , b.Money measurement concept , c.Business entity concept , d.Going concern conceptarrow_forward
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