As It Is Consistent with the Wherewithal to Pay Concept

question 157

True/False

As it is consistent with the wherewithal to pay concept, the tax law requires a seller to recognize gain in the year the installment sale occurs.

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Definitions:

Accumulated Depreciation

The contra asset account credited when recording the depreciation of a fixed asset.

Perpetual Inventory System

An inventory system that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.

Inventory System

A method of tracking the quantity, type, and value of products or materials a company has in stock.

Single-step Income Statement

A simplified income statement format that calculates net income by subtracting total expenses from total revenues in a single step.