Which of the following statements is always true regarding accounting methods available to a partnership?
A)If a partnership is a tax shelter, it can use the cash method of accounting.
B)If a non-tax-shelter partnership had "average annual gross receipts" of less than $5 million in all prior years, it can use the cash method.
C)If a partnership has a partner that is a personal service corporation, it cannot use the cash method.
D)If a partnership has a partner that is a C corporation, it cannot use the cash method.

Question

Quizplus · Accepted Answer

The statement "If a non-tax-shelter partnership had 'average annual gross receipts' of less than $5 million in all prior years, it can use the cash method" is always true for partnerships that meet the stated criteria. The other statements are not always true and may be dependent on additional factors or circumstances.

Which of the Following Statements Is Always True Regarding Accounting