Color, Inc

question 52

Multiple Choice

Color, Inc., is an accrual basis taxpayer.In December 2019, the company received from a customer a $500 claim for defective merchandise.Color paid the customer in January 2020.Also, in December 2019, the company received a bill of $800 for office supplies that had been purchased and used in November 2019.The bill was not paid until January 2020.In January 2020, the company received a claim for $600 for defective merchandise purchased in 2019.Color paid the customer the $600 in February 2020.Assuming that Color uses the recurring item exception to economic performance, the company's deductions for 2019 as a result of these facts are:

• A)$500.
• B)$600.
• C)$800.
• D)$1,300.
• E)$1,900.

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Definitions:

Key Ideas

The most important or central concepts, themes, or points within a discourse or document.

Diversity

The inclusion of individuals with a wide range of characteristics, such as race, gender, age, and cultural background, in a group or organization.

Chronology

The arrangement of events or dates in the order of their occurrence.

Conclusion

The final part of a document or speech that summarizes key points or presents a final judgment or decision.