Shadow Services Uses the Accrual Method and Reports on a Calendar

question 124

Essay

Shadow Services uses the accrual method and reports on a calendar year. This year, Shadow agreed to a uniform-cleaning contract with Odie Cleaning. Under the contract, Odie bills Shadow for cleaning services as the services are provided. At year-end, Shadow paid Odie $2,350 for the services rendered during the year. In addition, Shadow paid Odie $700 for cleaning services expected in January of next year. What amount, if any, can Shadow deduct for the cleaning services this year?

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Definitions:

Designated Leader

A person assigned or elected to lead or direct a group, team, or organization.

Major Decision

A significant choice or determination made after considering various factors, often having long-term impacts on an individual's life or an organization's direction.

Prejudice

A preconceived opinion or judgment towards people, groups, or subjects, often based on stereotypes, without factual knowledge or experience.

Discrimination

In psychology, the ability to differentiate between stimuli or situations; more broadly, unfair treatment of people based on their group memberships.