Which expense is allowable in computing a company's adjusted profit?
AGeneral provision for doubtful debts
BSpecific provision for a named irrecoverable debtCORRECT
CDonation to a political party
DCost of acquiring a delivery van
ICANTaxationCompanies Income Tax: Adjusted Profit2023
AI
Toaster Teacher
Why the answer is B, and why the others tempt you.
A specific provision against an identified debt is allowable because the loss is ascertained. General provisions are disallowed, political donations are not wholly and exclusively for the trade, and the cost of a van is capital expenditure that attracts capital allowances instead.
Want this in Pidgin, Yoruba, Igbo or Hausa? Sign up free →
Practice more Taxation questions
ICAN Taxation has thousands more questions like this — with Worked answers on every one.