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:

Phagocytic Cells

Cells that have the ability to engulf and absorb bacteria, other foreign particles, and sometimes dead cells, as part of the immune response.

Monokines

A subset of cytokines, which are proteins secreted by immune cells that impact the behavior of other cells, typically involved in inflammatory and immune responses.

Edema

An excessive buildup of fluid in body tissue.

Vessels

Structures such as veins, arteries, and ducts that carry fluids like blood or lymph through the body.