Question

Question 6 Which of the following are tax deductible expenses for a corporation? O dividend income O common stock dividends O land purchases O interest paid on debt O preferred stock dividends Question 7 1 pts

Answer 1

ANSWER

Tax Deductable Expenses Meaning : these are those expenses that are Operating in nature and are charged in the Profit & Loss account of the entity by debiting it. They are called as ‘Tax deductable Expenses’ because the company Gets tax savings on such expenses as these expenses reduces the ‘profit chargeable to tax’ of the company.

Correct Option : option (d) interest paid on debt

{as it is charged to p&l account and company gets tax saving on such expenses}

{option (a) is not even an expenses, option(b) is an appropriation of profit item and not an expense, option (c) is not an operation expenses as it is of capital nature , Option (c) is again an appropriation item and not an expenses}