Last year, J started his own men's clothing store business.His small operation did not warrant a sophisticated accounting system.Consequently, he simply kept track of all his receipts and disbursements in a checkbook for the business.When he files his return, he indicated that he used the cash method of accounting.This year he wants to change to the accrual method of accounting in order to more clearly reflect income.J may change to the accrual method without consent because he is changing from an erroneous method to a correct method.

Question

Quizplus · Accepted Answer

J cannot change from the cash method to the accrual method without obtaining consent from the IRS, as both methods are acceptable accounting methods, and changing methods requires approval.

Last Year, J Started His Own Men's Clothing Store Business