Question

When is income considered to be earned by an accrual-basis taxpayer? A. Income is considered to be earned by an accrual-basis taxpayer when all services have been rendered whether or not the amount of income can be determined with reasonable accuracy. B. An accrual-basis taxpayer earns income when title has transferred and all payments are received. C. Income is considered to be earned by an accrual-basis taxpayer when all the events have occurred which fix the right to receive the income and the amount of income can be determined with reasonable accuracy. O D. An accrual-basis taxpayer earns income when all payments for services or products are received and the amount of income can be determined with reasonable accuracy.

Answer 1

Ans is C

Income is constrained to be earned by a accrual basis taxpayers when all the event have occurred which ficx the right to receive the income and the amount of the income can be determined with reasonable accuracy

Explanation:-

Under accrual accounting, any event that generates a sale constitutes the requirement for recognition of revenue on that date. Revenue recognition events can take a multitude of forms as businesses provide a variety of services and goods to their customers. Revenue recognition events can include purchase orders or billable hours.