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You have been engaged to prepare the 2023 tax return for Yellow Dog Landscaping and...

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Accounting

You have been engaged to prepare the 2023 tax return for Yellow Dog Landscaping and Nursery. Yellow Dog provides you with their trial balance (a document that provides the amounts in all accounts which include both the balance sheet and income statement). As you are looking over the trial balance, you notice the expense account called Selling, General and Administrative (SGA) expense account is relatively large compared to the other expense accounts; therefore, you ask Yellow Dog for the detail of the SG&A account. You notice an expense of $2,500 and labeled life insurance premium payments. In order to deduct this expense on the 2023 tax return, what would be your primary concern with this expense?
Multiple Choice
Whether the expense is ordinary
Whether the expense is necessary
Whether the expense is reasonable in amount
None of the above

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