Jim Operates His Business on the Accrual Method and This

question 17

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.

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Definitions:

Aggressive Tendencies

Inclinations or predispositions towards acting or reacting with hostility or violence towards others or oneself.

Y Chromosome

A sex chromosome typically present in males, determining male biological characteristics.

Genetic Marker

A DNA sequence with a known physical location on a chromosome that can be associated with a particular gene or trait.

Fight-or-flight Reaction

A physiological response to perceived harmful events, attacks, or threats to survival, preparing the body to either fight the threat or flee to safety.