Yeah, if you click on a, b, or, d, you will get a different response.
Question: 1 Mike is a CPA. Widget, Inc., is an accrual-basis taxpayer. In Year 3, while preparing Widget’s Year 2 return, Mike discovered that Widget failed to include income on its Year 1 return that Widget received in Year 2 but that should have been included in income in Year 1 under the accrual method of accounting. What must Mike do?
A. Include the income on the Year 2 return.
Answer (A) is incorrect.
An amended return would need to be filed, and the agent would file an amended return at the request of the taxpayer.
B. Change Widget to the cash method of accounting.
C. Advise Widget of the error and the consequences of the error.
D. Refuse to prepare Widget’s Year 2 return until Widget agrees to amend its Year 1 return to include the amount of income.
AUD - 1st - 60 (12/12), 61 (2/13), 61 (8/13), 78! (11/15)
REG - 55 (2/16) 69 (5/16) Retake(8/16)
BEC - 71(5/16) Retake (9/16)
FAR - (8/16)
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