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A328 individual taxation final

Terms in this set (18)

actually paid in cash or by a cash equivalent
paid
paid using the accrual method
incurred
when are expenses generally deductible?
the year in which they are paid and never before
payments may be effected through a transfer of ___, ____, and ___/___
cash, checks, property, services
in a payment, it is not relevant whether or not the cash or cash equivalent is ____
borrowed
when are expenses that are paid by a credit card deductible?
at the time of the charge (rather than when the balance is paid)
are purchases on credit considered paid? what about if they have a promissory note?
no, no
the ___ method says that a taxpayer deducts expenses when they are "incurred"
accrual
all events test:
- establishing the existence of a ___ must have occurred
- the ___ of the liability can be determined with reasonable accuracy
liability, amount
exceptions to the cash method:
- there are several exceptions to the general rule of the cash method to prevent a taxpayer from ___ ___ by paying expenses ___
- examples: inventories, capital expenditures
accelerating deductions, early
cash method says expenses are deductible when ___
paid
___ ___: any expenditure resulting in the creation of an ___ having a useful life which extends substantially beyond the ___ of the ___ ___ may not be deductible when made, or may be deductible only in part
capital expenditures, asset, close, taxable year
capital expenditures are subject to the ___ ___ rules
uniform capitalization
financial accounting definition of ___: probably future economic benefits obtained or controlled by a particular entity as a result of past transactions or events
asset
when is prepaid interest deductible?
never
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