With Respect to the Prepaid Income from Services, Which of the Following

question 5

Multiple Choice

With respect to the prepaid income from services, which of the following is true?

• A)The treatment of prepaid income is the same for tax and financial accounting.
• B)A cash basis taxpayer can spread the income over the period services are to be provided if all of the services will be completed by the end of the tax year following the year of receipt.
• C)An accrual basis taxpayer can spread the income over the period services are to be provided if all of the services will be completed by the end of the tax year following the year of receipt.
• D)An accrual basis taxpayer can spread the income over the period services are to be provided on a contract for three years or less.
• E)None of these.

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Definitions:

Posttraumatic Stress Disorder

A psychiatric disorder that may occur in people who have experienced or witnessed a traumatic event, characterized by flashbacks, nightmares, and severe anxiety.

Schizophrenia

A severe mental disorder characterized by distorted thinking, perceptions, emotions, language, sense of self, and behavior.

Alcoholism

A pattern of behavior in which a person repeatedly abuses or depends on alcohol. Also known as alcohol use disorder.

Suicidal Ideation

The consideration or contemplation of ending one's own life, which can range from fleeting thoughts to detailed planning.