With Respect to the Prepaid Income from Services, Which of the Following

question 30

Multiple Choice

With respect to the prepaid income from services, which of the following is true?

• A) The treatment of prepaid income is the same for tax and financial accounting for both cash and accrual basis taxpayers.
• B) A cash basis taxpayer must report all of the income in the year received.
• C) An accrual basis taxpayer can spread the income over the period services are to be provided if all of the services will be completed within three years following the year of receipt.
• D) An accrual basis taxpayer can spread the income over the period services are to be provided on a contract for three years or less.
• E) None of these.

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Definitions:

Work Environment

The physical and psychological conditions under which employees perform their job duties.

User Account

A personalized set of access permissions and settings for an individual user of a computer or online service.

Sound Settings

Options within a device or application that control audio features, including volume, output devices, and sound effects.

Magnifier

A tool or application that enlarges text, images, and other objects on the screen to make them easier to see.