With Respect to Income from Services, Which of the Following

question 80

Multiple Choice

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

• A)The income is always amortized over the period the services will be rendered by an accrual basis taxpayer.
• B)A cash basis taxpayer can spread the income from a 24-month service contract over the contract period.
• C)If an accrual basis taxpayer sells a 36-month service contract on July 1, 2017 for $3,600, the taxpayer's 2017 gross income from the contract is $600.
• D)If an accrual basis taxpayer sells a 24-month service contract on July 1, 2017, one-half (12/24) the income is recognized in 2018.
• E)None of these.

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Definitions:

Smallest Value

The minimum value in a set of data points.

Negative

A term that describes a value less than zero, indicating direction, charge, or a decrease in a measurable quantity.

Central Location

A statistical term that refers to the center or typical value in a set of data, often measured by mean, median, or mode.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values; how spread out numbers are around the mean.