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Income Tax Planning
Chapter 4: Gross Income from Personal and Investment Activities/METHODS OF ACCOUNTING
Warren Academy Course SyllabusSyllabus Slides
Chapter Study Session

Chapter 4: Gross Income from Personal and Investment Activities

METHODS OF ACCOUNTING

01.Core Concepts

• Cash-basis taxpayers recognize income when it is received (or set aside) • Individuals and some businesses • Accrual-basis taxpayers recognize income when it is earned • Most businesses are accrual-basis taxpayers • Hybrid Method • Used when inventory is a material income producing factor