The Taxpayer Had Incorrectly Been Using the Cash Method of Accounting

question 18

Multiple Choice

The taxpayer had incorrectly been using the cash method of accounting. For 2012, the company voluntarily changed to the accrual method. The adjustment due to the change in method as calculated at the beginning of 2012 was $120,000 (positive) . The adjustment as calculated as of the end of 2012 was $80,000 (positive) .As a result of the change in method, the company must:

• A)Increase its income for 2012 by $120,000.
• B)Increase its income for 2012 by $80,000.
• C)Increase its income for 2012 by $30,000.
• D)Increase its income for 2012 by $40,000.
• E)None of the above.

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Definitions:

Nociception

The sensory process that provides the signals that lead to the perception of pain in response to a potentially harmful stimulus.

Endogenous Opiates

Naturally occurring chemicals in the body that reduce pain, enhance pleasure, and play a role in the stress response, similar to opioids.

Spinal Cord

A long, thin, tubular structure made up of nervous tissue, which extends from the brain and is encased within the vertebral column.

Acetylcholine

A neurotransmitter in both the central and peripheral nervous systems that plays a crucial role in muscle movement and cognitive functions.