Bill operates a proprietorship using the cash method of accounting, and this year he received the following payments:
-$100 in cash from a customer for services rendered this year
-a promise to pay $200 from a customer for services rendered this year
-tickets to a football game worth $250 as payment for services performed last year
-a check for $170 for services rendered this year that Bill forgot to cash
How much income should Bill realize on Schedule C?
A) $100
B) $300
C) $350
D) $270
E) $520

Question

Bill operates a proprietorship using the cash method of accounting, and this year he received the following payments:  
-$100 in cash from a customer for services rendered this year
-a promise to pay $200 from a customer for services rendered this year
-tickets to a football game worth $250 as payment for services performed last year
-a check for $170 for services rendered this year that Bill forgot to cash
How much income should Bill realize on Schedule C?
A) $100
B) $300
C) $350
D) $270
E) $520

Quizplus · Accepted Answer

Income is realized as property is received but the promise to pay is not property ($100 + $250 + $170 = $520).

Bill Operates a Proprietorship Using the Cash Method of Accounting