Colbert Operates a Catering Service on the Accrual Method

question 88

Multiple Choice

Colbert operates a catering service on the accrual method. In November of year 1 Colbert received a payment of $9,000 for 18 months of catering services to be rendered from December 1^st of year 1 through May 31^st year 3. When must Colbert recognize the income if his accounting methods are selected to minimize income recognition?

• A) $500 is recognized in year 1, $6,000 in year 2, and $2,500 in year 3.
• B) $500 is recognized in year 1 and $8,500 in year 2.
• C) $9,000 is recognized in year 3.
• D) $2,500 is recognized in year 1 and $6,500 in year 2.
• E) $9,000 is recognized in year 1.

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Definitions:

Phobias

Intense, irrational fears of specific objects or situations, leading to significant distress or impairment in social, occupational, or other important areas of functioning.

Behaviorism

A theory of learning based on the idea that all behaviors are acquired through conditioning.

Observable Behavior

Actions or reactions of an individual that can be seen and measured directly by others.

Inferiority Complex

A psychological condition where a person feels inadequate and deficient, often resulting in a lack of self-esteem and overcompensation in other areas.