A healthcare business that uses accrual accounting issues employee paychecks on January 10, 2012 that cover the 14-day work period December 25, 2011 through January 7, 2012. For federal income tax purposes, the employees should ____.

Question

Quizplus · Accepted Answer

Employees should report all of that paycheck as 2012 income for federal income tax purposes because income is taxed in the year it is received, not earned.

A Healthcare Business That Uses Accrual Accounting Issues Employee Paychecks