180k views
5 votes
The full-inclusion method requires accrual method taxpayers to include prepayments for goods or services into realized income.

True
False

User Cory House
by
7.8k points

1 Answer

2 votes

Final answer:

The full-inclusion method is True, as it requires accrual method taxpayers to include prepayments for goods or services in realized income as they are earned, irrespective of the actual provision of the goods or services.

Step-by-step explanation:

The statement that the full-inclusion method requires accrual method taxpayers to include prepayments for goods or services into realized income is True.

Under the accrual accounting method, income is reported in the fiscal period it is earned, regardless of when the payment is received. Therefore, if a business receives prepayment for goods or services, this prepayment is recognized as income at the time it is received. This full-inclusion principle ensures that businesses cannot defer the recognition of income by merely delaying the provision of goods or services associated with prepayments.

User MoCap
by
8.5k points

Related questions

asked Nov 20, 2024 67.6k views
KeithMahoney asked Nov 20, 2024
by KeithMahoney
7.9k points
1 answer
3 votes
67.6k views
asked Dec 24, 2024 15.0k views
Sabin asked Dec 24, 2024
by Sabin
7.7k points
1 answer
2 votes
15.0k views
1 answer
0 votes
103k views