Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

Financial Accounting

3. Accrual Accounting Concepts

Revenue Recognition and Expense Recognition

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Multiple Choice

Which of the following statements regarding the home mortgage interest expense deduction is correct?

Home mortgage interest expense is generally deductible as an itemized deduction on an individual's personal income tax return.

Home mortgage interest expense is only deductible if the mortgage is on a rental property.

Home mortgage interest expense is always fully deductible regardless of the amount of the loan or the use of the proceeds.

Home mortgage interest expense is never deductible under current tax law.

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Verified step by step guidance

Understand the concept of home mortgage interest expense deduction: This refers to the ability of taxpayers to deduct interest paid on a mortgage loan for their primary residence or second home, subject to certain limitations under tax law.

Review the tax law regarding itemized deductions: Home mortgage interest expense is generally deductible as an itemized deduction on an individual's personal income tax return, provided the mortgage meets specific criteria (e.g., the loan is secured by the home and used to buy, build, or substantially improve the home).

Evaluate the conditions for deductibility: Home mortgage interest expense is not deductible if the mortgage is on a rental property. Instead, interest on rental property loans is typically deductible as a business expense on Schedule E of the tax return.

Consider limitations on deductibility: Home mortgage interest expense is not always fully deductible. For example, under current tax law, there are limits on the amount of mortgage debt eligible for the deduction (e.g., $750,000 for loans taken out after December 15, 2017). Additionally, the use of proceeds must align with qualifying purposes.

Clarify the incorrect statement: Home mortgage interest expense is not 'never deductible' under current tax law. It remains deductible under specific conditions, primarily as an itemized deduction for personal residences, subject to limitations.