Which of the following taxpayers is required to use the accrual method of accounting?
A)A retail business with average annual gross receipts of $8,000,000.
B)A medical doctor with average annual gross receipts of $2 million.
C)An insurance agency with average annual gross receipts of $5 million.
D)All of these are required to use the accrual method.
E)None of these is required to use the accrual method.

Question

Quizplus · Accepted Answer

Under the Tax Cuts and Jobs Act, businesses with average annual gross receipts of $25 million or less in the preceding three years are allowed to use the cash method of accounting. All the entities listed have gross receipts below this threshold, so none is required to use the accrual method.

Which of the Following Taxpayers Is Required to Use the Accrual