Which of the following statements, if any, is false? O Under the cash receipts method, income is not recognized until a payment is actually or constructively received. 2 Under the accrual method, income is generally recognized when (1) all events have occurred that fix the right to receive income and (2) the amount to be received can be determined with reasonable accuracy. If a seller receives a payment from a customer in the form of a laptop computer (instead of a more normal method such as a cash, check or credit card payment) the receipt of the computer is not taxable to the seller because the seller did not receive any cash (or cash equivalent) from the customer. A cash-basis seller does not have to recognize any income at the time of a sale to a customer if the seller sells on its own credit to the customer (i.e., where the seller risks not getting paid by the customer). Vone of the above - they are all true statements
Which of the following statements, if any, is false? O Under the cash receipts method, income is not recognized until a payment is actually or constructively received. 2 Under the accrual method, income is generally recognized when (1) all events have occurred that fix the right to receive income and (2) the amount to be received can be determined with reasonable accuracy. If a seller receives a payment from a customer in the form of a laptop computer (instead of a more normal method such as a cash, check or credit card payment) the receipt of the computer is not taxable to the seller because the seller did not receive any cash (or cash equivalent) from the customer. A cash-basis seller does not have to recognize any income at the time of a sale to a customer if the seller sells on its own credit to the customer (i.e., where the seller risks not getting paid by the customer). Vone of the above - they are all true statements
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Which of the following statements, if any, is false?
O Under the cash receipts method, income is not recognized until a payment is actually or constructively received.
2 Under the accrual method, income is generally recognized when (1) all events have occurred that fix the right to receive income and (2) the
amount to be received can be determined with reasonable accuracy.
If a seller receives a payment from a customer in the form of a laptop computer (instead of a more normal method such as a cash, check or
credit card payment) the receipt of the computer is not taxable to the seller because the seller did not receive any cash (or cash equivalent)
from the customer.
A cash-basis seller does not have to recognize any income at the time of a sale to a customer if the seller sells on its own credit to the
customer (i.e., where the seller risks not getting paid by the customer).
Vone of the above - they are all true statements
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