One of the requirements that must be met in order to defer recognition of income for advance payments for goods is
A)the taxpayer's method of accounting for the sale for tax purposes is the same as the method used for financial reporting purposes.
B)the goods are on the taxpayer's premises on the last day of the tax year.
C)the goods are produced in the United States.
D)the amount received is more than the taxpayer's cost of the goods.

Question

Quizplus · Accepted Answer

The taxpayer's method of accounting for the sale for tax purposes must be the same as the method used for financial reporting purposes to defer recognition of income for advance payments for goods. Option B is not a requirement and option C also doesn't make any sense. Option D is partly correct, but it is not sufficient on its own.

One of the Requirements That Must Be Met in Order