An ordinary expense
I.is an expense commonly incurred in an income-producing activity.
II.is an expenditure that provides future benefits to an income-producing activity.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

An ordinary expense
I.is an expense commonly incurred in an income-producing activity.
II.is an expenditure that provides future benefits to an income-producing activity.
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A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

An ordinary expense refers to an expense that is commonly incurred in the ordinary course of an income-producing activity. It does not necessarily have to provide future benefits to the activity, so statement II is not entirely correct.

An Ordinary Expense I.is an Expense Commonly Incurred in an Income-Producing Activity