Question
With respect to unearned income from services, which of the following is true? None of the above If a cash basis taxpayer sells a 36-month
With respect to unearned income from services, which of the following is true?
| None of the above | ||
| If a cash basis taxpayer sells a 36-month service contract on July 1, 2020 for $3,600, the taxpayers 2021 gross income from the contract is $1,200 | ||
| A cash basis taxpayer can spread the income from a 24-month service contract over the contract period | ||
| If an accrual basis taxpayer sells a 24-month service contract on July 1, 2020, one-half (12/24) the income is recognized in 2021 | ||
| An accrual basis taxpayer will always recognize the income over the period the services will be rendered |
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Auditing Cases An Interactive Learning Approach
Authors: Mark S Beasley, Frank A. Buckless, Steven M. Glover, Douglas F Prawitt
7th Edition
0134421825, 9780134421827
