GH&F Is a Calendar Year, Accrual Basis Taxpayer

question 49

Multiple Choice

GH&F is a calendar year, accrual basis taxpayer. In October 2013, 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, 2013. 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:

Backtracking

A problem-solving technique that involves progressively testing solutions and, if they fail, reverting to previous steps to try alternative solutions.

Main Street

Main Street often refers to the primary retail street of a town or a neighborhood, where a significant amount of commercial activity occurs.

Creativity

Cognitive processes that employ appropriate novelty; originality that suits some purpose.

Generating Solutions

refers to the process of developing multiple answers or methods to solve a particular problem or achieve a certain outcome.