She begins the current year with $12,000 in accounts receivable from customers. During the year, she bills customers $210,000 in fees and receives $180,000 in payments on account. $8,000 of the receivables as uncollectible, leaving her a year-end receivable balance of $34,000. What is Arlene”s gross income if a. She uses the cash basis of accounting? Cash basis taxpayers recognize income as it is received. Therefore, Arlene will recognize the $180,000 of cash receipts as her gross income on the cash basis. Her write-off of uncollectible accounts does not affect her gross income because she is on the cash basis and none of the receivables written off would have been previously included in income. B. She uses the accrual basis of accounting?
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