Colbert Operates a Catering Service on the Accrual Method

question 113

Multiple Choice

Colbert operates a catering service on the accrual method. In November of year 1, Colbert received a payment of $9,000 for 18 months of catering services to be rendered from December 1 ^st of year 1 through May 31 ^stof year 3. When must Colbert recognize the income if his accounting methods are selected to minimize income recognition?

• A)$500 is recognized in year 1, $6,000 in year 2, and $2,500 in year 3.
• B)$500 is recognized in year 1 and $8,500 in year 2.
• C)$9,000 is recognized in year 3.
• D)$2,500 is recognized in year 1 and $6,500 in year 2.
• E)$9,000 is recognized in year 1.

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Definitions:

Competitiveness

The ability of a company, region, or country to produce goods and services that meet the test of international markets while simultaneously maintaining or expanding the real incomes of its citizens.

Human Capital Investments

Are investments people make in themselves to increase their value in the workplace. These investments might take the form of additional education or training.

Differentiate

To distinguish or set apart different items, concepts, or entities based on their unique characteristics or qualities.

Organization Anticipates

The process by which organizations attempt to foresee future challenges or opportunities and prepare accordingly.