On January 1,2013,an Accrual Basis Taxpayer Entered into a Contract

question 50

True/False

On January 1,2013,an accrual basis taxpayer entered into a contract to provide termite inspection service each month for 36 months.The amount received for the contract was $2,400.The taxpayer should report $1,600 of income in 2014.

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Definitions:

Opportunity Cost

The price paid for not selecting the next most favorable alternative when a choice is made.

Mowing A Lawn

The act of cutting the grass in a garden or an area of land to ensure it is maintained at a manageable height and appearance.

Range Of Prices

The range of prices refers to the spectrum of price levels at which goods or services are offered in the market, from the lowest to the highest.

Trade

The swapping of goods and services between two or more parties, within a single economy or across multiple economies.