A new corporation's choice for its annual accounting period
I.must be approved by the IRS.
II.must be the same as its majority shareholder.

Question

A new corporation's choice for its annual accounting period
I.must be approved by the IRS.
II.must be the same as its majority shareholder.
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Quizplus · Accepted Answer

Neither statement is correct. A new corporation can choose any accounting period as long as it is within 12 months and it falls in line with the corporation's business operations. The approval of the IRS is not required for a corporation to select its accounting period. The accounting period chosen by the corporation does not have to be the same as that of its majority shareholder.

A New Corporation's Choice for Its Annual Accounting Period