An Advance Payment Received in June 2018 by an Accrual

question 100

True/False

An advance payment received in June 2018 by an accrual basis and calendar year taxpayer for services to be provided over a 36-month period can be spread over four tax years.

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Definitions:

Current Ratio

The Current Ratio is a liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year.

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term liabilities with its most liquid assets.

Cash Ratio

A liquidity ratio that measures a company's ability to pay off its short-term liabilities with its cash and cash equivalents alone.

NWC to Total Assets

A financial ratio that measures the net working capital (current assets minus current liabilities) in relation to the total assets of a company.