With Respect to Income from Services, Which of the Following

question 80

Multiple Choice

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

• A)The income is always amortized over the period the services will be rendered by an accrual basis taxpayer.
• B)A cash basis taxpayer can spread the income from a 24-month service contract over the contract period.
• C)If an accrual basis taxpayer sells a 36-month service contract on July 1, 2017 for $3,600, the taxpayer's 2017 gross income from the contract is $600.
• D)If an accrual basis taxpayer sells a 24-month service contract on July 1, 2017, one-half (12/24) the income is recognized in 2018.
• E)None of these.

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Definitions:

Credit

The right-hand side of any account. A number entered on the right side of any account is said to be credited to an account.

Investment Percentage

The proportion of an investment in relation to the total market value or the capital of a project or entity.

Co-owned

Property or assets that are legally held or possessed by two or more entities or individuals.

Partnership

The association of two or more persons who act as co-owners of a business.