A partnership is owned by three individuals.The partnership generated $15 million of gross receipts per year on average from sales of its inventory.While the inventory is a material income-producing factor,the partnership records inventories as incidental supplies in its internal accounting.For tax purposes,the partnership will not be allowed the cash method of accounting.

Question

Quizplus · Accepted Answer

Based on the information provided, there is no indication that the partnership will not be allowed the cash method of accounting. The fact that they record inventories as incidental supplies for internal accounting purposes does not necessarily preclude them from using the cash method for tax purposes.

A Partnership Is Owned by Three Individuals