Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On December 12, 2021, Kzoo Company, a calendar year, cash basis business, mailed a $5,600 bill to Mrs. Ransom for professional services rendered during the

On December 12, 2021, Kzoo Company, a calendar year, cash basis business, mailed a $5,600 bill to Mrs. Ransom for professional services rendered during the month of November. Mrs. Ransom dropped off her $5,600 check at Kzoo's office on December 28, but the company secretary did not deposit the check in Kzoo's bank account until January 3. Which of the following statements is true?

Multiple Choice
  • According to the constructive receipt doctrine, Kzoo must recognize $5,600 income in 2021.
  • As a cash basis taxpayer, Kzoo does not recognize $5,600 income until 2022.
  • According to the substance over form doctrine, Kzoo does not recognize $5,600 income until 2022.
  • As a cash basis taxpayer, Kzoo can elect to recognize $5,600 income in either 2021 or 2022.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting Theory And Analysis Text Reading And Cases

Authors: Richard G. Schroeder, Jack M. Cathey, Myrtle W. Clark

7th Edition

0471379549, 9780471379546

More Books

Students also viewed these Accounting questions

Question

Find the investors expected profit.

Answered: 1 week ago