In the case of an accrual basis taxpayer, an item of income:
A)Is not recognized until cash is received.
B)From services is never recognized until the services are performed.
C)Is not recognized if the customer can return the goods.
D)Is recognized when all the events have occurred to fix the taxpayer's right to receive the income and the amount of the income can be determined with reasonable accuracy.
E)None of these.

Question

Quizplus · Accepted Answer

An accrual basis taxpayer recognizes income when all the events have occurred to fix the taxpayer's right to receive the income and the amount of the income can be determined with reasonable accuracy. This means that income is recognized when the revenue is earned, regardless of when payment is received.

In the Case of an Accrual Basis Taxpayer, an Item