The Constructive Receipt Doctrine Requires That Income Must Be Recognized

question 85

True/False

The constructive receipt doctrine requires that income must be recognized when it is made available to the cash basis taxpayer, although it has not been actually received. The constructive receipt doctrine does not apply to accrual basis taxpayers.

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Definitions:

Subtotals

Intermediate totals calculated by adding up a group of numbers, often used to make data analysis easier within financial documents or spreadsheets.

Accumulated Depreciation

The cumulative depreciation of an asset up to a single point in time, representing the decrease in its value due to wear and tear.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing insights into its financial position.

Rent Expense

The cost incurred from leasing a property or equipment for business operations, recognized as an expense on the income statement.