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Unformatted text preview: ACCTG 321 Spring 2010 Quiz #2 Version C 1. According to the Internal Revenue Code §162, deductible business expenses must be _________________. a. incurred for the production of investment income b. ordinary and necessary c. minimized d. appropriate and measurable e. personal and justifiable 2. Which of the following is a true statement? a. Interest expense is not deductible if the loan is used to purchase municipal bonds. b. Insurance premiums are not deductible if paid for "key man" life insurance. c. One half of the cost of business meals is not deductible. d. All of the above are true. e. None of the above is true. 3. Kenneth lived in his home for the entire year except for when he rented his home (near a very nice ski resort) to a married couple for 14 days in December. The couple paid Kenneth $14,000 in rent for the two weeks. Kenneth incurred $1,000 in expenses relating to the home for the 14 days. Which of the following statements accurately describes the manner in which Kenneth should report his rental receipts and expenses for tax purposes? a. Kenneth would include the rental receipts in gross income and deduct the rental expenses....
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This note was uploaded on 11/03/2010 for the course ACCTG 321 taught by Professor Will during the Spring '08 term at San Diego State.
- Spring '08