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Pozzi Company, a Cash Basis Business, Received $16,930 Cash as Payment

Question 60

Multiple Choice

Pozzi Company, a cash basis business, received $16,930 cash as payment on a loan Pozzi made to a business associate two years ago. The payment consisted of a $15,000 principal payment and $1,930 interest. On receipt of the cash, Pozzi recognizes:


A) No taxable income.
B) $1,930 taxable income.
C) $15,000 taxable income.
D) $16,930 taxable income.

Correct Answer:

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