Jim Operates His Business on the Accrual Method, and This

question 110

Multiple Choice

Jim operates his business on the accrual method, and this year, he received $4,000 for services that he intends to provide to his clients next year. Under what circumstances can Jim defer the recognition of the $4,000 of income until next year?

• A)Jim can defer the recognition of the income if he absolutely promises not to provide the services until next year.
• B)Jim must defer the recognition of the income until the income is earned.
• C)Jim can defer the recognition of the income if he has requested that the client not pay for the services until the services are provided.
• D)Jim can elect to defer the recognition of the income if the income is not recognized for financial accounting purposes.
• E)Jim can never defer the recognition of the prepayments of income.

---

Definitions:

Internal Visibility

Refers to the extent to which an employee's work and contributions are recognized and visible within their organization.

Assertiveness

Characterizes the ability to express one’s opinions and needs in a confident and respectful manner.

Ingratiation

A strategic social behavior aimed at gaining favor or acceptance from others, often through flattery or conformity.

High-Profile Projects

Projects that receive a significant amount of attention and visibility, often due to their scale, impact, or the interest level of stakeholders.