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:

Linear Striae

Long, thin lines or bands that can appear on the skin due to stretching, often associated with rapid growth or weight gain.

Asymmetry

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Montgomery Glands

Glands located around the areola of the breast, responsible for secreting protective lubricating oils.

Breast Asymmetry

A common condition where a woman's breasts vary in size, shape, or position.