$5.$ Which is the following statement is NOT true?

a$.$for a revenue to be taxable, it must be ordinary and necessary.

b$.$business start$-$up costs are expenses incurred before beginning business operations. These expenses may be deductible under certain circumstances.

c$.$depreciation of property that is used in business and has a useful life is generally deductible. Allowance depreciation not taken in a prior year cannot be taken in the current year.

d$.$ for an expense to be deductible, it must be both ordinary and necessary

$9.$ Tristate Tech Co$.$ accounts for inventory as materials and supplies that are not incidental. When can Tristate Tech deduct the costs of inventory in its federal income tax return?

a$.$when Tristate Tech receives the inventory from its supplier

b$.$when Tristate sells the inventory

c$.$when Tristate deposits in the check received from the customer

$10.$ Which of the following describes an $"$S corporation" under the Internal Revenue Code?

a$.$a corporation whose profit is taxed when earned, and then is taxed to the shareholders when distributed as dividends.

b$.$an unincorporated relationship existing between two or more owners who join to carry on a trade or business. Each owner contributes money, property, labor, or skills, and expects to share in the profits and losses of the business.

c$.$ A domestic corporation which can avoid double taxation as long as it meets certain tests. It is generally exempt from federal income tax other than tax on certain capital gains and passive income.

$12.$ Which of the following documents cannot be used to support that an expense is deductible?

a$)$ account statements

b$)$ cash register tapes

c$.$ invoices

d$.$ receipt books