Speak Corporation, a Calendar- Year, Accrual- Basis Taxpayer, Sell Packages

question 364

Multiple Choice

Speak Corporation, a calendar- year, accrual- basis taxpayer, sell packages of foreign langauge lessons to individuals planning to work overseas. In December 2018, it sold and received payment for $600,000 of 24- month lesson packages to be provided evenly through 2019 and 2020. Speak Corporation will recognize the
$600,000 of income

• A) all in 2020.
• B) all in 2018.
• C) half in 2019 and half in 2020.
• D) all in 2019.

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Definitions:

Romantic Love

A complex emotional and physiological experience, typically involving attraction, attachment, and idealization of another person.

Merchandise Inventory

Goods held by a company for the purpose of resale to customers in the regular course of business.

Beginning Inventory

The value of all the inventory held by a company at the start of an accounting period, used to calculate the cost of goods sold.

Net Purchases

The total amount of purchases made by a business after subtracting returns, allowances, and discounts.