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:

Organism

A living individual, ranging from single-celled to complex multicellular entities, capable of performing biological functions.

Flavor Aversion Conditioning

The learned avoidance of a particular food or drink because it has been associated with an illness or bad experience.

Thalamic Paraventricular Nuclei

A region in the thalamus involved in the regulation of various bodily functions, including stress responses, by communicating with the hypothalamus.

Amygdala

A part of the brain's limbic system involved in emotions, survival instincts, and memory.