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ACCT 230 ACCT230 ACCT/230 Discussion 3.docx – Week 3 Lost Check
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ACCT 230 ACCT230 ACCT/230 Discussion 3.docx – Week 3 Lost Check
Week 3: Lost Check
Read the attached case and comment on whether or not you agree with the conclusions reached by the court. Should the lost check be considered income in the year it is earned or should the income be recognized in the year when they had access to the cash (the year the check was reissued?)
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ACCT 230 ACCT230 ACCT/230 Discussion 3.docx – Week 3 Lost Check
Week 3: Lost CheckRead the attached case and comment on whether or not you agree with the conclusions reached by the court. Should the lost check be considered income in the year it is earned or should the income be recognized in the year when they had access to the cash (the year the check was reissued?)
Professor, This is a very interesting case indeed. My initial thoughts are how do you receive a check for payment of goods sold, in an amount as large as $77,441.83 and not realize you did not cash it.
The ruling concludedthe Walters did not keep ledger accounts showing cattle purchased or sold, not sure how any business can operate in such a manner.
This supports them not realizing they had not cashed the check received. I agree with the court ruling, guidance has to be defined in order for a business to follow it. Constructivereceipt was cited in the decision, which our text defines as “income is made available to the taxpayer so that he may draw upon it at any time” (Federal Taxation 2019).
