With Respect to Income from Services, Which of the Following

question 117

Multiple Choice

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

• A) The income is always amortized over the period the services will be rendered by an accrual basis taxpayer.
• B) A cash basis taxpayer can spread the income from a 24-month service contract over the contract period.
• C) If an accrual basis taxpayer sells a 36-month service contract on July 1, 2018 for $3,600, the taxpayer's 2018 gross income from the contract is $600.
• D) If an accrual basis taxpayer sells a 24-month service contract on July 1, 2018, one-half (12/24) the income is recognized in 2019.
• E) None of these.

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Definitions:

Secondary Prevention

Level of preventive medicine that focuses on early diagnosis, use of referral services, and rapid initiation of treatment to stop the progress of disease processes.

Chest Discomfort

A common symptom that can be caused by a wide range of conditions, from muscular strain to heart problems.

Electrocardiogram

A test that records the electrical activity of the heart to detect any heart problems.

Fluoride

A mineral used in dental care to strengthen tooth enamel and prevent cavities, often added to toothpaste, mouthwash, and some public water supplies.