Max Opened His Dental Practice (A Sole Proprietorship) in March

question 121

Essay

Max opened his dental practice (a sole proprietorship) in March 2017. At the end of the year, he has unpaid accounts receivable of $62,000 and no unpaid accounts payable. Should Max use the accrual method or the cash method for his dental practice?

---

Definitions:

Capillary Beds

Capillary beds are networks of capillaries where the exchange of water, oxygen, carbon dioxide, and many other nutrients and waste substances between blood and tissues occurs.

Umbilical Cord

A flexible cord-like structure containing blood vessels that connect a fetus to the placenta, supplying it with oxygen and nutrients during pregnancy.

Placenta

An organ that develops in the uterus during pregnancy, providing oxygen and nutrients to and removing waste from the fetus through the umbilical cord.

Oxygenated Blood

Blood that is rich in oxygen, typically found in the arterial system, except for the pulmonary arteries, which carry deoxygenated blood to the lungs.