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NEW QUESTION: 1
On December 1, 1997, Krest, a self-employed cash basis taxpayer, borrowed $200,000 to use in her
business. The loan was to be repaid on November 30, 1998. Krest paid the entire interest amount of
$ 24,000 on December 1, 1997. What amount of interest was deductible on Krest's 1997 income tax return?
A. $2,000
B. $0
C. $22,000
D. $24,000
Answer: A
Explanation:
Explanation
Choice "b" is correct. Cash basis taxpayers deduct interest in the year paid or the year to which the
interest relates, whichever is later. Even though all of the interest on this loan was paid on December 1,
1 997, only the interest relating to December 1997 can be deducted in 1997. The question does not give
an interest rate, but because the loan is to be repaid in a lump sum at maturity, 1/12 of the interest, or
$ 2,000 applies to each month.
Choice "a" is incorrect. Because $2,000 of the interest relates to 1997, this amount is deductible in 1997.
Choice "c" is incorrect. This is the amount that cannot be deducted until 1998, the year to which the
interest relates. Be sure to read questions like this very carefully, because if you had simply misread the
question as seeking the amount deductible in 1998, you would get the question wrong despite
understanding the rule.
Choice "d" is incorrect. Cash basis taxpayers can deduct interest in the year paid or the year to which the
interest relates, whichever is later, thus 11 months of the interest will not be deductible until 1998.
NEW QUESTION: 2
Which statement is correct?
A. The mandatory CSR guideline does not apply to customers who upgrade their warranty support to carepack or contract maintenance.
B. The optional CSR guideline does not apply to customers who upgrade their warranty support to carepack or contract maintenance.
C. The mandatory CSR guideline applies to customers who upgrade their warranty support to carepack or contract maintenance.
D. Mandatory and optional CSR guidelines only apply to a product with a warranty service level agreement.
Answer: D
Explanation:
Enhancements to warranty services are available through HP Care Pack services or customized service
agreements.
"Enhancements" indicates B is false. A can be true but depends (so false). D is false.
http://h18004.www1.hp.com/products/quickspecs/14212_div/14212_div.HTML#Service%20and%20Support
NEW QUESTION: 3
The "Resynchronize Token" function displays the token clock time after an administrator enters two consecutive tokencodes.
A. True
B. False
Answer: B
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