The Taxpayer Had Incorrectly Been Using the Cash Method of Accounting.For

question 54

Multiple Choice

The taxpayer had incorrectly been using the cash method of accounting.For 2015,the company voluntarily changed to the accrual method.The adjustment due to the change in method as calculated at the beginning of 2015 was $120,000 (positive) .The adjustment as calculated as of the end of 2015 was $80,000 (positive) .As a result of the change in method,the company must:

• A)Increase its income for 2015 by $120,000.
• B)Increase its income for 2015 by $80,000.
• C)Increase its income for 2015 by $30,000.
• D)Increase its income for 2015 by $40,000.
• E)None of the above.

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Definitions:

Epinephrine

A hormone and medication, also known as adrenaline, that increases heart rate, muscle strength, blood pressure, and sugar metabolism, used in treating allergic reactions and asthma attacks.

Extensor Surfaces

The outer or posterior surfaces of limbs, where the extensor muscles are located, responsible for straightening joints.

Anaphylactic Reaction

A severe, potentially life-threatening allergic response that requires immediate medical intervention.