Todd Operates a Business Using the Cash Basis of Accounting

question 70

Multiple Choice

Todd operates a business using the cash basis of accounting. At the end of last year, Todd was granted permission to switch his sales on account to the accrual method. Last year, Todd made $426,500 of sales on account, and $66,600 was uncollected at the end of the year. What is Todd's §481 adjustment for this year?

• A)Increase income by $426,500
• B)Increase income by $16,650
• C)Increase expenses by $66,600
• D)Increase expenses by $426,500
• E)Todd has no §481 adjustment this year.

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Definitions:

Sympathetic Nervous System Arousal

Activation of the part of the autonomic nervous system that increases heart rate, releases adrenaline, and prepares the body for a 'fight or flight' response.

Sympathetic Nervous System

The sympathetic nervous system is part of the autonomic nervous system that prepares the body for fight or flight responses, increasing heart rate, redirecting blood flow, and releasing adrenaline, among other effects.

Subjective Experience

Personal, individual perceptions and feelings that are unique to each person and cannot be fully understood or experienced by others.

Tranquilizing Drugs

Medications used to reduce tension or anxiety, often acting by depressing the central nervous system.