This Year Kevin Provided Services to Several Clients, Each of Whom

question 98

Multiple Choice

This year Kevin provided services to several clients, each of whom paid with different types of property. Which of the following payments is not included in Kevin's gross income?

• A)Cash
• B)Shares of stock listed on the New York Stock Exchange.
• C)A used car
• D)Gold coins
• E)All of these are included in gross income

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Definitions:

Direct Write-Off Method

A bookkeeping approach where bad debts are immediately expensed against earnings when they are considered irrecoverable.

Uncollectible Receivables

Receivables from sales or loans that the company is unable to collect and therefore considers as a loss.

Liquidation

The winding-up process when a partnership goes out of business.

Dishonored Note

A promissory note that has not been paid at maturity or is in default.