10) Dividends declared in 2019, and paid in 2020, are included in the income of the recipient when he is paid, regardless of whether he is on a cash or accrual basis. True or False
11) An insurance sales representative who earns commissions that are made available to her in the taxable year, but who does not take them in that year, must report them as part of that year's taxable income. True or False
12) A taxpayer makes a legal assignment to an outside party of a salary check she is to receive in the future. the taxpayer still must report the salary check as her own compensation income. True or False
13) A taxpayer may use a cash basis for one business and an accrual basis for another business. True or False
1-False, if he follows accrual basis, he must record income in the year, dividend is declared.
2-true, he must report.
3-false, she should report in the year, in which it is received.
4-True, he can follow different system for different business
10) Dividends declared in 2019, and paid in 2020, are included in the income of the...
9) Most changes in accounting method require IRS approval. True or False 10) Dividends declared in 2019, and paid in 2020, are included in the income of the recipient when he is paid, regardless of whether he is on a cash or accrual basis. True or False 11) An insurance sales representative who earns commissions that are made available to her in the taxable year, but who does not take them in that year, must report them as part of...
1) Fred and Phyllis Black are a married couple with no children. On June 15, 2019, Fred died. Phyllis has not remarried. For 2019, what is Phyllis' most favorable filing status? 2) Fred and Phyllis Black are a married couple with no children. On June 15, 2019, Fred died. In 2020, Phyllis has not remarried and has a dependent son who continues to live with her. For 2019, what is Phyllis' most favorable filing status for 2020? 3) Fred and...
14) For a cash method taxpayer, expenses paid with borrowed funds are deductible in the year in which the loan is repaid. True or False 15) In general, a CPA on the cash basis method will never have a bad debt deduction. True or False 16) A cash-basis taxpayer may deduct prepaid business expenses currently regardless of the period of time to which the expenses relate. True or False 17) A cash-basis taxpayer must always include checks in income in...
13) A taxpayer may use a cash basis for one business and an accrual basis for another business. True or False 14) For a cash method taxpayer, expenses paid with borrowed funds are deductible in the year in which the loan is repaid. True or False 15) In general, a CPA on the cash basis method will never have a bad debt deduction. True or False 16) A cash-basis taxpayer may deduct prepaid business expenses currently regardless of the period...
True/False 1. A cash basis taxpayer will include compensation in income in the year actually or constructively received. 2. Although the interest from municipal bonds is not taxable any gain on the sale of such bonds is taxable. 3. To qualify for the Series EE bond exclusion the bonds can be a gift from grandparents. 4. Cash dividends as well as stock dividends are taxable. 5. A property settlement is a division of property pursuant to divorce and is taxable...
7) A cash-basis taxpayer must always include checks in income in the year received. True or False 18) A sale may be reported on the installment method even though no payments are received in the year of sale. True or False 19) Sasha owned an apartment building, but she retained a real estate agent to manage the building and collect rents. Following his usual practice, the agent collected the December 2019 rents and mailed them to Sasha. Sasha did not...
ABC Company provided the following income items to its outside accountant. This is the first time the accountant has worked with ABC, and during the initial meeting she failed to ask if ABC is an accrual basis taxpayer or a cash basis taxpayer. Calculate ABC’s income using both methods, Accrual base and Cash base, so the accountant is ready for her next meeting with them. You are calculating ABC’s income as of December 31, 2019. Include explanations in your calculation....
18) A sale may be reported on the installment method even though no payments are received in the year of sale. True or False 19) Sasha owned an apartment building, but she retained a real estate agent to manage the building and collect rents. Following his usual practice, the agent collected the December 2019 rents and mailed them to Sasha. Sasha did not receive them in the mail until January 3, 2020. Sasha must report the rents in income in...
21) An accrual basis taxpayer must report rental income received in advance for three years in the year received. True or False
ABC Company provided the following income items to its outside accountant. This is the first time the accountant has worked with ABC, and during the initial meeting she failed to ask if ABC is an accrual basis taxpayer or a cash basis taxpayer. Calculate ABC’s income using both methods so the accountant is ready for her next meeting with them. You are calculating ABC’s income as of December 31, 2018. Include explanations in your calculation. (4 POINTS) $10,000 received December...