**Question:**If an employee takes a customer to lunch and discusses business, can the employee deduct the cost of a meal? Explain.---**Options:**- **A.** Employees can no longer deduct any portion of the cost of meals and entertainment.- **B.** Employees can deduct 50% of the entire cost.- **C.** Employees can deduct 50% of their own meals and entertainment that are business related but none of the cost of the customer's meal.- **D.** Employees can deduct 50% of their own meals and entertainment that are business related as well as 100% of the cost of the customer's meal.

Tax deduction: It implies to a provision that reduces or decreases the taxable income of the business and as a result, the tax liability of the business is reduced. This includes both standard and itemized deductions. Whenever there is an occasional lunch with an employee, staff, or other groups, specifically for the business meetings or discussion, then the cost of meal is considered as a tax-deductible expense, but to a certain limit. The employee is allowed or eligible to avail 50% of the cost of meal as a tax deduction. Therefore, the correct option is B.

Business

Accounting

If an employee takes a customer to lunch and discusses business, can the employee deduct the cost of a meal? Explain. OA. Employees can no longer deduct any portion of the cost of meals and entertainment OB. Employees can deduct 50% of the entire cost. OC. Employees can deduct 50% of their own meals and entertainment that are business related but none of the cost of the customer's meal. OD. Employees can deduct 50% of their own meals and entertainment that are business related as well as 100% of the cost of the customer's meal.

If an employee takes a customer to lunch and discusses business, can the employee deduct the cost of a meal? Explain. OA. Employees can no longer deduct any portion of the cost of meals and entertainment OB. Employees can deduct 50% of the entire cost. OC. Employees can deduct 50% of their own meals and entertainment that are business related but none of the cost of the customer's meal. OD. Employees can deduct 50% of their own meals and entertainment that are business related as well as 100% of the cost of the customer's meal.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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