Simplex had incorrectly been using the cash method of accounting. For 2023, it voluntarily changed to the accrual method. The adjustment due to the change in method as calculated at the beginning of 2023 was $120,000 (positive). The adjustment as calculated as of the end of 2023 was $80,000 (positive). As a result of the change in method, Simplex increases its 2023 gross income by: a. $120,000. b. $40,000. c. $30,000. d. $80,000.

Simplex had incorrectly been using the cash method of accounting. For 2023, it voluntarily changed to the accrual method. The adjustment due to the change in method as calculated at the beginning of 2023 was $120,000 (positive). The adjustment as calculated as of the end of 2023 was $80,000 (positive). As a result of the change in method, Simplex increases its 2023 gross income by: a. $120,000. b. $40,000. c. $30,000. d. $80,000.

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter16: Accounting Periods And Methods

Section: Chapter Questions

Problem 7DQ

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