Dave Is a Plumber Who Uses the Cash Method of Accounting

question 117

Multiple Choice

Dave is a plumber who uses the cash method of accounting. This year Dave requested that his clients make their checks payable to his son, Steve. This year Steve received checks in the amount of $90,750 for Dave's plumbing services. Which of the following is a true statement?

• A)Dave is taxed on $90,750 of plumbing income this year.
• B)Steve is taxed on $90,750 of plumbing income this year.
• C)Steve is taxed on $90,750 of income from gifts received this year.
• D)Dave may deduct the $90,750 received by Steve.
• E)None of the choices are correct.

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Definitions:

Partial Reinforcement

A type of learning in which a behavior is reinforced only a portion of the time it occurs, known to increase resistance to extinction.

Non-Contingent Reinforcement

A form of reinforcement where rewards are given at fixed or variable intervals independent of the recipient's behavior.

Classical Conditioning

The act of learning that happens when two stimuli are paired together repeatedly, and a reaction initially caused by the second stimulus starts to be triggered by the first stimulus exclusively.

Discriminative Stimulus

A cue or event that indicates that a particular response will lead to a certain consequence in operant conditioning.