Explain the difference between the two methods available; the Tax Court's method and the IRS method, to allocate expenses between personal and rental use of property.
What will be an ideal response?
If using the IRS method, expenses are allocated to the rental property based on the ratio of the number of rental days to total number of days used. The rest of the expenses are allocated to personal use. If using the Tax Court method, interest and taxes are allocated to the rental property by the ratio of the total rental days to the entire year (365 days) while the remaining expenses are allocated based on the ratio of the number of rental days to total number of days used (as in the IRS method). The Tax Court method yields a smaller percentage of the interest and taxes allocated to rental income. This allows a larger portion of depreciation expense to be used to offset rental income.
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On a statement of cash flows prepared using the direct method, if accounts receivable decrease from one accounting period to the next, cash receipts from sales will not be as great as sales
Indicate whether the statement is true or false
Insourcing
A) is a method of transferring the management and/or day-to-day execution of an entire business function to a third-party service provider. B) is a class of systems that integrates large systems. C) connects people, data, and diverse systems. D) is the in-house development of applications.
Siler City receives a trust donation for the purpose of maintaining flower beds in city parks, but the donor does not specify that the principal must be maintained. This type of trust would be most appropriately accounted for in a:
A. Permanent Fund. B. General Fund. C. Special Revenue Fund. D. Private Purpose Trust Fund.
For the Knights of Labor, the central conflict that needed to be won was between:
A. Workers and those who controlled money (i.e., bankers, stockbrokers, lawyers, employers). B. Anyone considered a "producer" (i.e., farmers, shopkeepers, and employers) and those who controlled money (i.e., bankers, stockbrokers, lawyers). C. Workers and government officials. D. Workers and their employers.