Franklin Company Began Business in 2013 and Has Consistently Used

question 25

True/False

Franklin Company began business in 2013 and has consistently used the cash method to report income from the sale of inventory in income tax returns filed for 2013 through 2017. As a result of an audit by the IRS, Franklin was required to change to the accrual method of accounting beginning with 2018. The net adjustment due to the change is a positive adjustment to income. The adjustment may be spread equally over 2018 and the three following years.

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Definitions:

Preoperational

The second stage in Piaget's theory of cognitive development, occurring roughly between the ages of 2 and 7, characterized by symbolic thinking, egocentrism, and difficulty understanding conservation.

Concrete Operational

A stage of cognitive development in Piaget's theory, occurring roughly between the ages of 7 and 11, during which children gain a better understanding of mental operations and can think logically about concrete events.

Formal Operational

The stage in Piaget's theory of cognitive development during which people begin to think logically about abstract concepts and hypothetical situations.

Egocentrism

The inability to differentiate between self and others, often leading to viewing things exclusively from one's own perspective.