Which of the following businesses can use the cash method?
I.The Hateris Group, a partnership with 3 equal partners, of which one is The Hillard Corporation. Average revenues for the Hateris Group, a financial planning firm, over the last three years are $4,000,000.
II.The Glidder Corporation, a clothing retailer that has average annual sales over the last three years are $35,000,000.

A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Question

Which of the following businesses can use the cash method?
I.The Hateris Group, a partnership with 3 equal partners, of which one is The Hillard Corporation. Average revenues for the Hateris Group, a financial planning firm, over the last three years are $4,000,000.
II.The Glidder Corporation, a clothing retailer that has average annual sales over the last three years are $35,000,000.
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A)Only statement I is correct.
B)Only statement II is correct.
C)Both statements are correct.
D)Neither statement is correct.

Quizplus · Accepted Answer

The Hateris Group, being a partnership with average revenue of $4,000,000 over the last three years can use the cash method according to IRS guidelines. The Glidder Corporation, with average annual sales of $35,000,000, exceeds the threshold of $25,000,000 and needs to use the accrual method according to IRS guidelines.

Which of the Following Businesses Can Use the Cash Method