Question
The taxpayer had incorrectly been using the cash method of accounting. For 2019, the company voluntarily changed to the accrual method, with the permission of
The taxpayer had incorrectly been using the cash method of accounting. For 2019, the company voluntarily changed to the accrual method, with the permission of the IRS. The unrealized receivables at the beginning of 2019 totaled $80,000. The unrealized receivables as of the end of 2019 totaled $160,000. As a result of the change in method for 2019, the IRC 481 adjustment under the most favorable treatment will cause the company to:
a.Increase its income for 2019 by $160,000.
b.Increase its income for 2019 by $80,000.
c.Increase its income for 2019 by $30,000.
d.Increase its income for 2019 by $40,000.
e.Increase its income for 2019 by $20,000.
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Fundamental Accounting Principles Volume I
Authors: Kermit Larson, Tilly Jensen, Heidi Dieckmann
16th Canadian edition
978-1260305821
