Which of the following is true concerning the corporate taxation of insurance premiums and the treatment of uninsured losses?
A) Both premiums and expected losses are deductible at the beginning of the year.
B) Uninsured losses are deductible only when they occur and premiums are deductible in the year paid.
C) Since payments for insured losses are 100% tax deductible, commercial insurance is economically inefficient.
D) Losses paid under the deductible amount are not tax deductible because the insured assumed the losses.
B
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The _____ occurs when ratings of all employees fall at the high end of the scale.
A. leniency error B. recency effect C. primacy effect D. central tendency error
Answer the following statements true (T) or false (F)
1. The balance sheet shows the balance in Bonds Payable plus any discount or minus any premium. 2. The debt to equity ratio measures the proportion of total liabilities relative to the total equity. 3. The lower the debt to equity ratio, the greater the company's financial risk. 4. If the debt to equity ratio is greater than 1, the company is financing more assets with equity than with debt. 5. The fact that invested cash earns interest over time is called the time value of money.
An important purpose of closing entries is to
A) set temporary account balances to zero to begin the next period. B) adjust the accounts in the ledger. C) help in preparing financial statements. D) set permanent account balances to zero to begin the next period.
What is the difference between a static and a flexible budget? Which one is most often used in variance analysis and why?