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 $25 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.
E) All of the above statements are always true.

Question

Quizplus · Accepted Answer

The statement that is always true regarding accounting methods available to a partnership is that if a non-tax-shelter partnership had "average annual gross receipts" of less than $25 million in all prior years, it can use the cash method. The other statements are not always true as they depend on specific circumstances, such as the partnership's tax status or the type of partner involved.

Which of the Following Statements Is Always True Regarding Accounting