Taxation of Business and Travel Expense -My CPE April 19 Flashcards
Review
Which accounting principle allows accountants to post transactions in time periods, even if the transaction extends beyond the end of the period?
A. Cash basis accounting.
B. Accrual basis accounting.
C. Periodicity assumption.
D. GAAP principle.
Answer: Periodicity Assumption
This is an accounting principle that assumes that the financial activities of a business can be divided into distinct time periods (e.g. months, quarters or years) to prepare financial statements. It allows for the allocation of revenuesand expensesto specific time intervals
Review
The matching principle requires companies to match expenses with the revenue they generate. The matching principle is important for __________________ accounting.
A. Cash basis accounting.
B. Integrated accounting.
C. Accrual based accounting.
D. Tax accounting.
Answer: Accrual based accounting
Accrual-based accounting recognizes revenue when it it is earned and expenses when they are incurred, regardless of when cash changes hands. This method adheres to the matching principle, providing a more accurte view of a company’s financial performance over time. It is commonly used in financial reporting for a more comprehensive understanding of a company’s financial situation
Review
Identify the conditions where you can deduct the travel expenses of a person who accompanies you on a business trip.
A. If the person is your employee.
B. If the person has a bona fide business purpose for the travel.
C. If the person would otherwise be allowed to deduct the travel expenses.
D. All of the above.
Answer: All of the above
To deduct the travel expenses of someone who accompanies you on a business trip,all three conditions must be met: a) they should be your employee,b) have a bnna fide business purpose for the travel, c) and be eligible to deduct the expenses
Review
Explore the term refers to fees and tips given to porters, baggage carriers, hotel staff, and staff on ships.
Choose one
A. Entertainment expenses.
B. Travel allowances.
C. Incidental expenses.
D. Accommodation costs.
Answer: Incidentl expenses
Incidental expenses typically include fees and tips given to various service staff, such as porters, baggage carriers, hotel staff, and staff on ships. These expenses are separate from lodging and meal costs.
Review
What expenses are included in transportation expenses for tax purposes?
Choose one
A. The ordinary and necessary costs of commuting from one workplace to another within the city or general area that is your tax home.
B. The ordinary and necessary costs associated with visiting clients or customers.
C. The ordinary and necessary costs incurred when attending a business meeting away from your regular workplace.
D. All of the above.
Answer: All of the above
The correct answer is all of the above because all three options describe scenarios where transportation expenses are considered ordinary and necessary costs for conducting your business or profession and are thus eligible for tax deductions.
Review
Which of the following commuting expenses are typically deductible for tax purposes?
Choose one
A. Gasoline expenses.
B. Public transportation costs.
C. Business-related parking fees when visiting a customer or client.
D. Toll expenses.
Answer:
Business-related parking fees when visiting a customer or client.
Parking fees incurred while visiting a customer or client for business purposes are treated as legitimate business expenses. These expenses are deductible because they directly relate to the active conduct of your trade or profession and contribute to the generation of business income. Therefore, you can typically claim them as deductions on your tax return.
Assessment
TCJA stands for ____________________.
Choose one
A. Tax Credits and Justifiable Actions.
B. The Comprehensive Jobs Amendment.
C. Tax Cuts and Jobs Act.
D. Technical Compliance and Judicial Adjudication.
Answer: The Tax Cuts and Jobs Act
Assessment
Which accounting method does the SEC require public companies to use in the U.S?
Choose one
A. Accrual basis of accounting.
B. Cash basis of accounting.
C.Companies can choose between accrual and cash basis.
D.There is no such requirement for public companies.
Answer: Accrual Basis of accounting
Assessment
What is an individual’s tax home defined as?
Choose one
A. The city or general area where they live.
B. The city or general area where they were born.
C. The entire city or general area where their main place of business or work is located, regardless of where they live.
D. The city or general area where their favorite vacation spot is located.
Answer: The entire city or general area where their main place of business or work is located, regardless of where they live.
Assessment
You can’t use the standard mileage rate if you __________________.
Choose one
A. Use five or more cars at the same time (such as in fleet operations).
B. Used the Modified Accelerated Cost Recovery System (MACRS).
C. Claimed a section 179 deduction on the car.
D. All of the above.
Answer: All of the above
Assessment
Which of the following expenses are generally deductible for business travel purposes?
Choose one
A. Entertainment-related meals.
B. Expenses associated with shipping of baggage between regular and temporary work locations.
C. Personal car expenses incurred for reaching the business destination.
D. Entertainment tickets.
Answer: Expenses associated with shipping of baggage between regular and temporary work locations
Assessment
What expenses can you deduct, if your trip was primarily for business, and you extended your stay for a vacation, made a personal side trip, or engaged in other personal activities while at your business destination?
Choose one
A. You can deduct all travel expenses, both business-related and personal.
B. You can deduct only your personal travel expenses.
C. You can deduct only your business-related travel expenses.
D. You can deduct all travel expenses if you maintain a travel diary
Answer: You can deduct only your business-related travel expenses.
Assessment
Identify the bonus depreciation rate for 2026.
Choose one
A. 48%.
B. 55%.
C. 60%.
D. 20%.
Answer: 20%
Assessment
You cannot elect to deduct more than ______________ of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles placed in service during the tax years beginning in 2022.
Choose one
A. $45,000.
B. $60,000.
C. $30,000.
D. $27,000.
Answer: $27,000
Assessment
What method can you use to figure your meal expenses?
Choose one
A. The average cost method.
B. The estimated cost method.
C. The actual cost method.
D. The presumptive cost method.
Answer: The actual cost method.
Assessment
What requirements must your property meet to qualify for the section 179 deduction?
Choose one
A. It must be a new property.
B. It must be used exclusively for personal purposes.
C. It must be acquired by gift.
D. It must not be property described under “What Property Does Not Qualify”.
Answer:It must not be property described under “What Property Does Not Qualify”
