QUESTION 1

1. Which of the following is a true statement?

   		Meals, lodging, and incidental expenditures are only deductible if the taxpayer is away from home overnight while traveling.
   		Meals are deductible for an employee who is forced to work during the lunch hour.
   		When a taxpayer travels solely for business purposes, only half of the costs of travel are deductible.
   		If travel has both business and personal aspects, the cost of transportation is always deductible but the deductibility of lodging depends upon whether business is conducted that day.
   		None of the choices are true.

QUESTION 2

1. Which of the following types of transactions may not typically be accounted for using the cash method for small proprietorships?

   		Sales of inventory
   		Services
   		Sales of securities by an investor
   		Payments of debt
   		All of the choices can be accounted for using the cash method.