Rachel, a self-employed business consultant, has significant expenses for travel business meals with clients in her work, but she has not kept receipts. She will be able to deduct a reasonable amount of these ordinary and necessary expenses under the Cohan rule.
Answer the following statement true (T) or false (F)
False
The Cohan rule does not apply to travel and entertainment. The Code does not allow any travel and entertainment deductions unless strict documentation requirements are met.
You might also like to view...
How can researchers and managers arrive at the best interpretation of research findings?
What will be an ideal response?
A minor agency rule:
a. if disapproved by Congress, must be resubmitted to both houses of Congress. b. if disapproved by Congress, must be revised according to Congressional guidelines. c. if disapproved by Congress, has no chance of approval by the President. d. takes effect but, if after being submitted to Congress it is disapproved, it is treated as though it had never taken effect.
Top managers of Computer Manufacturing are alarmed by their operating losses
They are considering dropping the desktop product line. The company accountants have prepared the following analysis to help make this decision. Computer Manufacturing Income Statement For the Year Ended December 31, 20XX Total Laptop Desktop Sales Revenue $930,000 $575,000 $355,000 Variable Costs 507,000 267,000 240,000 Contribution Margin 423,000 308,000 115,000 Fixed Costs: Manufacturing 375,000 225,000 150,000 Selling and Administrative 62,000 45,000 17,000 Total Fixed Costs 437,000 270,000 167,000 Operating Income (Loss) $(14,000 ) $38,000 $(52,000 ) Total fixed manufacturing costs will not change if the company stops selling the desktop product line. The fixed selling and administrative costs, however, will be avoided. Prepare a differential analysis to show whether Computer Manufacturing should drop the desktop product line. Should the desktop product line be dropped? Explain your answer. What will be an ideal response
The process of obtaining present values is known as compounding
Indicate whether the statement is true or false.