Expenditure is deductible for tax purposes only where it is:
AReasonable in amount
BApproved by the directors
CWholly, exclusively, necessarily and reasonably incurred for the purpose of the tradeCORRECT
DSupported by a bank transfer
ICANTaxationCompanies Income Tax: Adjusted Profit2023
AI
Toaster Teacher
Why the answer is C, and why the others tempt you.
CITA applies the wholly, exclusively, necessarily and reasonably test. Expenditure failing any limb, such as private expenditure or capital outlay, is added back in computing adjusted profit.
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.