With Respect to Income from Services, Which of the Following

question 55

Multiple Choice

With respect to income from services, which of the following is true?

• A) The income is always amortized over the period the services will be rendered by an accrual basis taxpayer.
• B) A cash basis taxpayer can spread the income from a 24-month service contract over the contract period.
• C) If an accrual basis taxpayer sells a 36­month service contract on July 1, 2014 for $3,600, the taxpayer's 2014 gross income from the contract is $600.
• D) If an accrual basis taxpayer sells a 24-month service contract on July 1, 2014, one-half (12/24) the income is recognized in 2015.
• E) None of the above.

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Definitions:

Wagner Act

Also known as the National Labor Relations Act of 1935, it is a foundational statute of US labor law that guarantees the right of private sector employees to organize into trade unions, engage in collective bargaining, and take collective action such as strikes.

Unfair Labor Practices

Actions by employers or unions that violate workers' rights or the legal rules governing labor relations.

Exclusive Representation

The legal right of a chosen union to represent all employees in a bargaining unit in negotiations with the employer, regardless of whether every employee is a union member.

Wagner Act

Another name for the National Labor Relations Act of 1935, which established the legal right for workers to join unions and engage in collective bargaining in the United States.