The Constructive Receipt Doctrine Requires That Income Must Be Recognized

question 85

True/False

The constructive receipt doctrine requires that income must be recognized when it is made available to the cash basis taxpayer, although it has not been actually received. The constructive receipt doctrine does not apply to accrual basis taxpayers.

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Definitions:

Underapplied

This term refers to a situation where the allocated manufacturing overhead costs are less than the actual overhead costs incurred.

Overapplied

Overapplied refers to a situation where the allocated overhead cost in an accounting period is greater than the actual overhead cost.

Cost of Goods Manufactured

The total production cost of goods completed during a specific period, including labor, materials, and overhead costs.

Schedule

A predetermined or planned timeline for activities or events, often outlining specific tasks and their intended start and finish times.