ACC 105 - Chapter 3 Questions with Correct Answers
A taxpayer maintains an office in her home where she conducts a
dressmaking business. During the year she collects $4,000 from sales,
pays $1,300 for various materials and supplies, and properly allocates
$2,500 of rent expense and $500 of her utilities expense to the use of her
home office. What amount of the rent and utilities expense may she
deduct in the current year in computing her net income or loss from the
dressmaking business? Correct Answer-2700
Which of the following taxpayers qualifies for a home office deduction?
Correct Answer-An accounting student who maintains a home office
used exclusively to prepare tax returns.
A taxpayer who is self-employed consultant took a trip to New York
primarily for business. He takes 2 personal days to visit friends and sight
seeing tours. How should he treat the expenses related to this trip?
Correct Answer-The cost of all the airfare and the business days should
be deducted, while the cost of the personal days are not.
Which of the following expenses in deductible as an entertainment
expense? Correct Answer-The cost of a cocktail party for clients paid for
by a computer salesman at a computer fair.
Sandra is self-employed consultant. Until this year he was always an
employee. He comes to discuss his new business with you. As his tax
accountant, you should Correct Answer-All of the above.
, Which of the following factors is not considered by the IRS in
determining whether an activity is a hobby? Correct Answer-All of the
above are considered to determine if an activity is a hobby.
Which of the following business gifts are fully deductible? Correct
Answer-A gift to an employee for 15 years of continued service, costing
$200.
Which of the following employees may deduct the cost of a uniform?
Correct Answer-A cheerleader for the San Diego Chargers football team
who purchases her own costume.
Which of the following expenses incurred while the taxpayer is away
from home overnight is not included as a travel expense? Correct
Answer-business gifts
Which of the following taxpayers may use the standard mileage method
of calculating transportation costs? Correct Answer-An attorney who
uses his Porsche for calling on clients
All of the following are deductible as moving expenses in the current tax
year, except: Correct Answer-All of the above are deductible moving
expenses
What form does an employee use to report expenses that are fully
reimbursed by an employer under an accountable plan? Correct Answer-
A taxpayer maintains an office in her home where she conducts a
dressmaking business. During the year she collects $4,000 from sales,
pays $1,300 for various materials and supplies, and properly allocates
$2,500 of rent expense and $500 of her utilities expense to the use of her
home office. What amount of the rent and utilities expense may she
deduct in the current year in computing her net income or loss from the
dressmaking business? Correct Answer-2700
Which of the following taxpayers qualifies for a home office deduction?
Correct Answer-An accounting student who maintains a home office
used exclusively to prepare tax returns.
A taxpayer who is self-employed consultant took a trip to New York
primarily for business. He takes 2 personal days to visit friends and sight
seeing tours. How should he treat the expenses related to this trip?
Correct Answer-The cost of all the airfare and the business days should
be deducted, while the cost of the personal days are not.
Which of the following expenses in deductible as an entertainment
expense? Correct Answer-The cost of a cocktail party for clients paid for
by a computer salesman at a computer fair.
Sandra is self-employed consultant. Until this year he was always an
employee. He comes to discuss his new business with you. As his tax
accountant, you should Correct Answer-All of the above.
, Which of the following factors is not considered by the IRS in
determining whether an activity is a hobby? Correct Answer-All of the
above are considered to determine if an activity is a hobby.
Which of the following business gifts are fully deductible? Correct
Answer-A gift to an employee for 15 years of continued service, costing
$200.
Which of the following employees may deduct the cost of a uniform?
Correct Answer-A cheerleader for the San Diego Chargers football team
who purchases her own costume.
Which of the following expenses incurred while the taxpayer is away
from home overnight is not included as a travel expense? Correct
Answer-business gifts
Which of the following taxpayers may use the standard mileage method
of calculating transportation costs? Correct Answer-An attorney who
uses his Porsche for calling on clients
All of the following are deductible as moving expenses in the current tax
year, except: Correct Answer-All of the above are deductible moving
expenses
What form does an employee use to report expenses that are fully
reimbursed by an employer under an accountable plan? Correct Answer-
