On November 1, 20X1, an accrual basis taxpayer receives $3,600 in advance for 24-months of subscription services.
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On November 1, 20X1, an accrual basis taxpayer receives $3,600 in advance for 24-months of subscription services. The taxpayer includes in gross income _____________ in 20X1, _____________ in 20X2 and _____________ in 20X3
Accrual basis taxpayers usually report income in the year it is due to them but must report income received in advance in the year they receive it. Therefore, if on November 1, 20x1, the taxpayer receives $3,600 in advance for 24 months of subscription services, the $3,600 would be reported as income in 20x1 under both the cash and accrual methods.
Related Book For
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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