14. Why does the federal tax law disallow a business deduction for political contributions A. A deduction for the payment of a political contribution would be a subsidy for bad beha B. A deduction for the payment of a political contribution would subsidize partisan po C. The payment of a political contribution is not an expense D. A deduction for the payment of a fine or penalty t litical activities. for financial reporting purposes. would distort the measurement of taxable income. 35. Pozzi Company, a cash basis business, received $16,930 cash as payment on a loan Pozzi made to a business associate two years ago. The payment consisted of a $15,000 principal payment and 51,950 On receipt of the cash, Pozzi recognizes A. No taxable income. B. $1,930 taxable income. C. $15,000 taxable income. D. $16,930 taxable income. 36. A taxpayer that wants to change its taxable year from a fiscal year to a calendar year is not required to True False 37. Federal and state political lobbying expenses are nondeductible. True False 38. A permanent difference between book income and taxable income affects only one taxable year. True False