1. If a taxpayer does not know the total amount of proceeds to be received on an installment sale, e.g. contingent earn-out proceeds, they are precluded from using the installment method of accounting for the sale.

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True

False

2. When an instrument is called before maturity, less OID will have been recognized at the time of call than would have been recognized had the actual term been the original term.

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True

False

3. Non-incidental supplies are expensed as consumed whereas incidental supplies are expensed when paid.

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True

False

4. If incidental supplies are not used in the manufacture of inventory for sale to customers in the ordinary course of business, the cost of the supplies may be deducted as an ordinary and necessary business expense when paid.

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True

False

5. Cost segregation studies can only be performed on newly constructed buildings.

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True

False

6. The sale or other disposition of an installment obligation results in the recognition of gain or loss to the seller of the obligation.

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True

False

7. An exception from the application of 263A for inventory exists for manufacturers whose annual gross receipts do not exceed $25 million.

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True

False

8. In order to claim a deduction, estimates of shrinkage are never permitted.

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True

False

9. Trade discounts are usually considered adjustments to the purchase price and are available to the purchaser without regard to the timeliness of payment.

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True

False