Which of the Following Statements Concerning the Cash Method of Accounting

question 115

Multiple Choice

Which of the following statements concerning the cash method of accounting is true?

• A) A cash basis taxpayer who is in constructive receipt of an income item must recognize that income, even if the item is not in the taxpayer's actual possession.
• B) A cash basis taxpayer can deduct the purchase cost of business equipment.
• C) A cash basis taxpayer does not recognize gross income on receipt of an economic benefit unless that benefit consists of money.
• D) A cash basis taxpayer can deduct interest when it is paid, regardless of the time period for which the interest is charged.

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Definitions:

Alfred Adler

An Austrian medical doctor and psychotherapist, a pioneer in individual psychology emphasizing the importance of feelings of inferiority and the creative self.

Karen Horney

A psychoanalyst who contributed to the development of theories on neurosis, personality, and psychoanalytic femininity.

Libido

A term often used in psychoanalytic theory to denote the energy associated with sexual instincts and desires.