On January 1, 2019, an Accrual Basis Taxpayer Entered into a Contract

question 8

True/False

On January 1, 2019, an accrual basis taxpayer entered into a contract to provide termite inspection service each month for 24 months.The amount received for the contract was $2,400.The taxpayer reported $1,200 as income on its financial statement for 2019, and should do the same for its tax return.

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Definitions:

Obligations

Duties or commitments that one is bound to, usually due to legal, moral, or personal reasons.

Sense of Purpose

The feeling of having a goal or determination in life.

Diffidence

A trait of lacking confidence in oneself and being hesitant in asserting oneself.

Academic Plans

Strategized programs or outlines created by students or educational institutions to achieve educational objectives.