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Provision for the estimated amount of trade debtors' accounts, which might not be collected

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Question - Referring to relevant statutory provisions and common law, discuss whether, for the current income year, the following amounts would be as an allowable deduction against assessable income.

a) Provision for the estimated amount of trade debtors' accounts, which might not be collected.

b) An amount of $9,000 paid to a solicitor for preparing a partnership deed.

c) Newspapers purchased by an accountant who advises clients on financial and investment matters.

d) Travel cost of a business executive to attend a trade fair in London paid by the employer.

e) Speeding fines of $ 500 paid by an owner to a driver.

Answer -

Trade debtors account is a specifically proper type of account that accesses invoice facilities with all customers. Overall tax related with trade debtors are applicable for several goods and other services. Accounts can be accessed with facility of raising invoices and supplying different goods and services. Trade debtors account is useful to implement conditions of taxation rules and policies in a constructive mode. Organizations continue their all important work with trade debtors account distributively.

An amount of $9000 partnership deed is a particular type of agreement between any partners of a particular firm that depends on several outlines in a simple way. However, there are several rules and regulations between all partners in partnership business with shares, capital, partner, administration, salary and capital also. All profit is related to partnership deeds for a specific organization primarily. $9000 partnership deed is a value to complete a particular work among different partners in a specific time period without any types of hassle (Chowdhury et al. 2019).

Financial investment for case of newspaper purchase by an accountant there is a clear concept about taxation practices and laws appropriately. Investment with some amount of finance in newspapers required more capital to conclude all requirements perfectly.

Travel cost is another requirement that is included in a particular phase that is provided by employer to maintain all types of expenditure. Cost of travel in London is extra expenditure that is not included in estimation cost from before situation and condition respectively.

Expenditure of $500 is not estimated from before whereas it is an extra expenditure that is not included in income or salary. $500 amount is an additional requirement that creates another sectional condition for taxation practices and laws. Spending a fine of $500 from an owner to a driver is a basic classified part of several laws in a particular country.


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