Which of the Following Payments Received on December 31, 2014

question 110

Multiple Choice

Which of the following payments received on December 31, 2014, would be recognized by a cash basis taxpayer in 2014, but would not be recognized in 2014 by an accrual basis taxpayer? I. Checks received from customers for services rendered during November and December 2014. The checks are deposited in the bank account on January 4, 2015. II. Checks received from customers for services to be rendered during 2015. The checks are received in the morning mail and deposited in the bank account on December 31, 2014. A check received from a customer for a service contract. The services under the contract III. are to be rendered over 24 months, beginning in January 2015. The check is deposited in the bank account on January 4, 2014.

• A) Only statement I is correct.
• B) Only statements I and II are correct
• C) Only statement III is correct.
• D) Only statements II and III are correct.
• E) Only statement II is correct.

---

Definitions:

Cliched

Describing phrases or ideas that have been overused to the point of losing their original meaning or effectiveness.

Readability

Readability measures how easy it is for a reader to understand and comprehend written text, influenced by factors like sentence structure, choice of words, and layout.

Comprehension

The ability to understand and grasp the meaning of something, such as reading material or spoken language.

White Space

The unmarked portions of a page or screen, used in design and layout to create visual clarity and improve readability.