Colbert Operates a Catering Service on the Accrual Method

question 44

Multiple Choice

Colbert operates a catering service on the accrual method. In November of year 1 Colbert received a payment of $9,000 for 18 months of catering services to be rendered from December 1st of year 1 through May 31st year 3. When must Colbert recognize the income if his accounting methods are selected to minimize income recognition?

• A) $500 is recognized in year 1, $6,000 in year 2, and $2,500 in year 3.
• B) $500 is recognized in year 1 and $8,500 in year 2.
• C) $9,000 is recognized in year 3.
• D) $2,500 is recognized in year 1 and $6,500 in year 2.
• E) $9,000 is recognized in year 1.

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Definitions:

Happiness

A state of well-being and contentment, often associated with emotions ranging from contentment to intense joy.

Newborn's Life

Pertains to the early stages of a baby's existence, focusing on health, development, and adaptation to the world outside the womb.

Nuclear Family

A family group consisting of two parents and their children (one or more), regarded as a basic social unit.

Oppression

A system of inequality where one group is unjustly maintained in a lower position by various forms of discrimination and injustice.