Acct4305 110 quiz 6 - Study guides, Class notes & Summaries

Question 1 1 / 1 pts An expense need not be recurring in order to be “ordinary.” True False Rationale: An expense is ordinary if it is normal, usual, or customary in the type of business conducted by the taxpayer and is not capital in nature. However, the expense need not be recurring to be deductible as ordinary. Question 2 1 / 1 pts Under the “one­year rule” for the current period deduction of prepaid expenses of cash basis taxpayers, the asset must expire or be consume...

An expense need not be recurring in order to be “ordinary.” True False Rationale: An expense is ordinary if it is normal, usual, or customary in the type of business  conducted by the taxpayer and is not capital in nature. However, the expense need not  be recurring to be deductible as ordinary. Question 2 1 / 1 pts Under the “one­year rule” for the current period deduction of prepaid expenses of cash  basis taxpaye...