tax accounting 4 495441

1.       Individual proprietors report their business income and deductions on: Form 1065 Form 1120S Schedule C Schedule A Form 1041 2.       According to the Internal Revenue Code §162, deductible business expenses must be one of the following? incurred for the production of investment income ordinary and necessary minimized appropriate and measurable personal and justifiable 3.       Which of the following is NOT likely to be allowed as a current deduction for a landscaping and nursery business? cost of fertilizer accounting fees cost of a greenhouse cost of uniforms for employees a cash settlement for trade name infringement 4.       The IRS would most likely apply the arm’s length transaction test to determine which of the following? whether an expenditure is related to a business activity whether an expenditure will be likely to produce income timeliness of an expenditure reasonableness of an expenditure All of these 5.       Which of the following business expense deductions is most likely to be unreasonable in amount? Compensation paid to the taxpayer’s spouse in excess of salary payments to other employees. Amounts paid to a subsidiary corporation for services where the amount is in excess of the cost of comparable services by competing corporations. Cost of entertaining a former client when there is no possibility of any future benefits from a relation with that client. None of these is likely to be unreasonable in amount. Compensation paid to the taxpayer’s spouse in excess of salary payments to other employees, amounts paid to a subsidiary corporation for services where the amount is in excess of the cost of comparable services by competing corporations, and cost of entertaining a former client when there is no possibility of any future benefits from a relation with that client are all likely to be considered unreasonable in amount.  6.       Which of the following is a true statement? Interest…