Al is a medical doctor who conducts his practice as a sole proprietor. During 2016, he received

Question:

Al is a medical doctor who conducts his practice as a sole proprietor. During 2016, he received cash of $280,000 for medical services. Of the amount collected, $40,000 was for services provided in 2015. At the end of 2016, Al had of $60,000, all for services rendered in 2016. In addition, at the end of the year, Al received $12,000 as an advance payment from a health maintenance organization (HMO) for services to be rendered in 2017. Compute Al's gross income for 2016:
a. Using the cash basis of accounting.
b. Using the accrual basis of accounting.
c. Advise Al on which method of accounting he should use.
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...