Bendom Inc, a Calendar Year, Accrual Basis Corporation, Hired Rukel

question 83

Multiple Choice

Bendom Inc, a calendar year, accrual basis corporation, hired Rukel Company to provide professional services. Rukel completed the services on November 30, 2018, and immediately sent Bendom a bill for $37,750. Bendom paid the bill on January 4, 2019. Which of the following statements is false? 

• A) If Bendom and Rukel are related parties, Rukel must report $37,750 income on its 2018 tax return regardless of its method of accounting.
• B) If Rukel uses the accrual method, it must report $37,750 income on its 2018 tax return.
• C) If Bendom and Rukel are unrelated parties, Bendom can deduct the $37,750 accrued expense on its 2018 tax return.
• D) If Bendom and Rukel are related parties, Bendom can deduct the $37,750 accrued expense on its 2018 tax return only if Rukel uses the accrual method of accounting.

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Definitions:

Carbon-Carbon Double Bond

A chemical bond between two carbon atoms involving four bonding electrons, making compounds more reactive.

Geometry

The branch of mathematics that deals with the properties and relationships of points, lines, surfaces, and solids.

Alkene

Organic compounds that differ from alkanes by having at least one double bond between carbon atoms, making them unsaturated.

Heat Of Hydrogenation

The heat of hydrogenation is the change in enthalpy that occurs when an unsaturated compound reacts with hydrogen to become saturated, used as a measure of the stability of the compound’s double bonds.