Testing - I think I'm doing it wrong. 25 lines of test for very little logic. Fork & tell me how you'd do it instead.

line_item.rb

class LineItem < ActiveRecord::Base

  belongs_to :invoice
  
  def allocated?
    status == 'allocated'
  end
  
  def refundable?
    allocated? && invoice.refundable?
  end

  def cancellable?
    allocated? && invoice.cancellable?
  end
end

line_item_spec.rb

describe LineItem
  describe "permissions" do
    subject {LineItem.new(status: status, invoice: Invoice.new)}
    context "with an invoice that allows for refunds and cancellations" do
      before { subject.invoice.stub!(refundable?: true, cancellable?: true)}
      context "and allocated" do
        let(:status) {'allocated'}

        it { should be_refundable }
        it { should be_cancellable }
      end

      context "and not allocated" do
        let(:status) {'cancelled'}
        it { should_not be_refundable }
        it { should_not be_cancellable }
      end
    end
    context "with an invoice that doesn't allow for refunds and cancellations" do
      before { subject.invoice.stub!(refundable?: false, cancellable?: false)}
      let(:status) {'allocated'}
      it { should_not be_refundable }
      it { should_not be_cancellable }
    end
  end
end

Yeah, I don't see any other way to do it if you want to test all variations. One bool expression requires 2 tests. Two bool expressions require four. I do not see any way to make the tests shorter and still testing all boolean values.

Perhaps this is an incremental improvement?
https://gist.github.com/pda/5431874/5143067b3baff5b929f70048626f61721cb2864f

It pushes the slight complexity of setting up the Invoice up to the initial subject declaration, allowing the contexts to declare their parameters as simply as possible.

Also, a bit of (arguable) whitespace improvement to make things clearer.

Of course, this isn't a fundmental improvement. I think it's one of those things which requires a lot of assertions to test all cases. Reducing the amount of code used to express those assertions would be adding indirection and complexity.