Poole Services, a Calendar Year Taxpayer, Billed a Client for $1,675

question 25

True/False

Poole Services, a calendar year taxpayer, billed a client for $1,675 of services on November 30, 2020, and received a check in full payment from the client on January 12, 2021. If Poole is a cash basis taxpayer, it reports $1,675 taxable income in 2020.

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Definitions:

Mediation

A form of alternative dispute resolution where a neutral third party, the mediator, helps disputing parties find a mutually satisfactory solution.

Dispute

A disagreement or argument about something important.

Compel Arbitration

A legal process where a court requires disputing parties to resolve their issues through arbitration rather than litigation.

Arbitrated

Having disputes settled through arbitration, which is a form of alternative dispute resolution involving an impartial third party to make binding decisions.