Section 26, NIRC. [Note: The question is unfair because it gives an initial impression that the examiner is asking the statement which best…

The question

Section 26, NIRC. [Note: The question is unfair because it gives an initial impression that the examiner is asking the statement which best characterizes a GPP but the real question is found after the enumeration of the choices which might not be not be noticed by the examinee.] Income is considered realized for tax purposes when: (2011 Bar Question)

1. A.it is recognized as revenue under accounting standards even if the law does not do so.
2. B.the taxpayer retires from the business without approval from the BIR.
3. C.the taxpayer has been paid and has received in cash or near cash the taxable income.
4. D.the earning process is complete or virtually complete and an exchange has taken place.

This question has not been answered yet.