With Respect to the Prepaid Income from Services, Which of the Following

question 5

Multiple Choice

With respect to the prepaid income from services, which of the following is true?

• A)The treatment of prepaid income is the same for tax and financial accounting.
• B)A cash basis taxpayer can spread the income over the period services are to be provided if all of the services will be completed by the end of the tax year following the year of receipt.
• C)An accrual basis taxpayer can spread the income over the period services are to be provided if all of the services will be completed by the end of the tax year following the year of receipt.
• D)An accrual basis taxpayer can spread the income over the period services are to be provided on a contract for three years or less.
• E)None of these.

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Definitions:

Fractions

Mathematical expressions representing the division of one integer by another, comprising a numerator and a denominator.

Linear Equations

Equations of the first degree, meaning they involve only linear terms and constant terms.

Inconsistent

Inconsistent describes a system of equations that has no solution, meaning there is no set of values that satisfy all equations simultaneously.

Value Of K

A specific quantity or variable that needs to be identified or solved for in an equation or mathematical problem.