Which of the following statements regarding a corporation's overall accounting method is true?
A)If a corporation's average gross receipts for 2016-2018 are $26,500,000, the corporation is required to use the accrual method of accounting in 2019.
B)If a corporation's first year of existence is 2018 and the corporation's gross receipts in 2018 are $29 million, the corporation is required to use the accrual method of accounting in 2019.
C)Both of these are true statements.
D)Neither of these are true statements.

Question

Quizplus · Accepted Answer

Both statements A and B are true because they reflect the IRS requirements for accounting methods based on gross receipts. Corporations with average gross receipts exceeding $25 million over the preceding three years are required to use the accrual method, as are corporations with gross receipts exceeding $25 million in their first year.

Which of the Following Statements Regarding a Corporation's Overall Accounting