GH&F Is a Calendar Year, Accrual Basis Taxpayer

question 34

Multiple Choice

GH&F is a calendar year, accrual basis taxpayer. In October 2018, GH&F received a $18,000 cash payment from a tenant who leases space in a commercial office building that GH&F owns. The payment was rent for the 18-month period beginning on November 1, 2018. As a result of the payment, GH&F should report: 

• A) $2,000 book income and taxable income
• B) $2,000 book income and $18,000 taxable income
• C) $18,000 book income and taxable income
• D) None of the above

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Definitions:

Standard Oil

An American oil producing, transporting, refining, and marketing company established by John D. Rockefeller, which was a major part of the early petroleum industry and later broken up due to antitrust laws.

Singer Sewing Machines

A brand of sewing machines that became synonymous with the domestic and industrial sewing machine industry starting in the 19th century.

Aristocracy

Aristocracy refers to a form of government in which power is held by the nobility, a privileged class that possesses hereditary titles or ranks, and often has wealth, social status, and political influence.

Wealthy Americans

Individuals or families in the United States possessing a significant amount of financial assets or income.