A Cash Basis Calendar Year C Corporation Reports $100,000 of Accounts

question 42

Multiple Choice

A cash basis calendar year C corporation reports $100,000 of accounts receivable on the date of its conversion to an S corporation on February 14.By the end of the year, $60,000 of these receivables are collected.Calculate any built-in gains tax, assuming that there is sufficient taxable income.

• A)$0.
• B)$10,000.
• C)$21,000.
• D)$35,000.

Analyze the impact of paying an invoice within or outside the discount period using the gross method.

Understand the control features of a voucher system and how it strengthens internal control.

Comprehend the recording and approval processes in a voucher system and the preparation of related journal entries.

Identify different types of accounts and their roles within the voucher system.

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Definitions:

Suggestion

The psychological process by which a person guides the thoughts, feelings, or behavior of another.

Polygraphs

Instruments that measure physiological responses, such as heart rate and blood pressure, to determine if a person is lying.

Error Rate

The frequency or proportion of mistakes made over a specific period or within a given dataset.

Emotionality

The observable behavioral and physiological component of emotion; the degree to which a person can be characterized as emotional.