Which of the Following Payments Received on December 31,2016,would Be

question 132

Multiple Choice

Which of the following payments received on December 31,2016,would be recognized by a cash basis taxpayer in 2016,but would not be recognized in 2016 by an accrual basis taxpayer?
I.Checks received from customers for services rendered during November and December 2016.The checks are deposited in the bank account on January 4,2017.
II.Checks received from customers for services to be rendered during 2017.The checks are received in the morning mail and deposited in the bank account on December 31,2016.
III.A check received from a customer for a service contract.The services under the contract are to be rendered over 24 months,beginning in January 2017.The check is deposited in the bank account on January 4,2016.
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• A)Only statement I is correct.
• B)Only statements I and II are correct
• C)Only statement III is correct.
• D)Only statements II and III are correct.
• E)Only statement II is correct.

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