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:

Experimental Units

The smallest division of experimental material to which a treatment is independently applied in a study.

Allergy Symptoms

Physical reactions or ailments resulting from the immune system's response to substances it considers harmful or foreign.

Drowsiness

A state of feeling abnormally sleepy or tired, often leading to a decreased level of alertness.

Block Design

An experimental design that groups subjects or experimental units into blocks to control for variability not accounted for by the explanatory variables.