In Which of the Following Circumstances Would a Cash Basis

question 122

Multiple Choice

In which of the following circumstances would a cash basis taxpayer be required to account for an item of income or deduction under the accrual method of accounting?

• A)Alice receives advance payment for services that she will perform and complete by the end of the following tax year.
• B)Ben paid his business property taxes at year-end even though they were not due until the end of January.
• C)Cheryl received six months of pre-paid rent on her rental property just before the end of the year.
• D)Donald prepaid a one-year service contract on his copy machine just before year-end.
• E)A cash basis taxpayer will not be required to use the accrual basis method of accounting in any of the above circumstances.

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Definitions:

Behavior Genetics

The study of the role genetic factors play in shaping behaviors, personality, and psychological traits.

Genetic

Relating to genes and heredity, including the transmission of characteristics from parents to offspring.

Environmental Influences

The impact of external factors such as culture, climate, and social interactions on an individual's development and behavior.

Heritability

The proportion of variation among individuals that we can attribute to genes. The heritability of a trait may vary, depending on the range of populations and environments studied.