With Respect to Income from Services, Which of the Following

question 79

Multiple Choice

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

• A)An accrual basis taxpayer will always recognize the income over the period the services will be rendered.
• 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, 2019 for $3,600, the taxpayer's 2019 gross income from the contract is $600.
• D)If an accrual basis taxpayer sells a 24-month service contract on July 1, 2019, one-half (12/24) the income is recognized in 2020.
• E)None of these.

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Definitions:

Crystallized Intelligence

The ability to utilize acquired knowledge and experience.

Vocabulary

The set of words within a language that are familiar to an individual.

Mental Flexibility

The capacity to adjust one's thinking or approach in response to changing environments or situations.

Ego Integrity

The final stage in Erik Erikson's psychosocial development theory, where one reflects on their life and can feel a sense of fulfillment or despair.