The Accrual Method I.is Permitted for the Advance Receipt of Rent Income

question 115

Multiple Choice

The accrual method
I.is permitted for the advance receipt of rent income.
II.is never permitted under the deferral method.
III.is permitted for the advance receipt of payments for goods to be delivered within the next tax year if the payment is less than the cost of goods sold and the payment is deferred for financial accounting purposes.
IV.is permitted for the advance receipt of interest income.
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• A)Only statement I is correct.
• B)Only statement III is correct.
• C)Only statements I and II are correct.
• D)Only statements II and III are correct.
• E)Only statements II, III, and IV are correct.

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Definitions:

Short-termism

A focus on short-term results at the expense of long-term interests.

Quarterly Earnings

A company's profit or earnings report issued every quarter, reflecting its financial performance over a three-month period.

Sustainable Development

Development that meets the needs of the present without compromising the ability of future generations to meet their own needs, typically focusing on environmental, economic, and social pillars.

Volatile World

A term describing an environment characterized by rapid and unpredictable changes, often affecting global economies, politics, and societies.