Todd Operates a Business Using the Cash Basis of Accounting

question 22

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 $423,500 of sales on account, and $65,400 was uncollected at the end of the year. What is Todd's §481 adjustment for this year?

• A) Increase income by $423,500
• B) Increase income by $16,350
• C) Increase expenses by $65,400
• D) Increase expenses by $423,500
• E) Todd has no §481 adjustment this year.

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Definitions:

Prejudice

A preconceived opinion that is not based on reason or actual experience.

Discrimination

The unfair treatment of individuals based on their membership in a certain group or category, such as race, gender, or age.

Stereotyping

The act of assigning a set of characteristics to all members of a group, often based on limited or inaccurate information.

Jigsaw Classroom

An educational approach designed to minimize competition and foster cooperative learning among students by dividing assignments into segments, making each student responsible for sharing a piece of the task.