TQK, LLC, provides consulting services and was formed on 1/31/X5.Aaron and ABC, Inc., each hold a 50 percent capital and profits interest in TQK.If TQK averaged $27,000,000 in annual gross receipts over the last three years, what accounting method can TQK use for X9?
A)Accrual method.
B)Cash method.
C)Hybrid method.
D)Accrual method or cash method.

Question

Quizplus · Accepted Answer

TQK must use the accrual method because its average annual gross receipts exceed the $25 million threshold, which requires the use of the accrual method for tax purposes.

TQK, LLC, Provides Consulting Services and Was Formed on 1/31/X5