Donna Owns a Cleaning Service

question 97

Multiple Choice

Donna owns a cleaning service.Reed,a customer,receives Donna's bill for October 2017 services of $65 on October 31,2017.Reed pays the $65 on January 4,2018.
I.If Donna is a cash-basis taxpayer,she recognizes the income in 2018.
II.If Donna is an accrual-basis taxpayer,she will recognize the $65 in 2017.
III.Donna will recognize the $65 in 2017 regardless of accounting method,because that is when she earned the income.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Only statement III is correct.
• D)Statements I and II are correct.
• E)Statements I and III are correct.

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Definitions:

Organized Whole

Organized whole refers to a concept in Gestalt psychology that emphasizes seeing patterns and objects as unified wholes rather than merely the sum of their parts.

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Well-known sequences of musical notes that are easily recognizable and often evoke specific memories or emotions.

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The slight difference in the visual images that reach each eye, contributing to the perception of depth.