A partnership with a C corporation partner must always use the accrual method as its accounting method.
An exception applies to partnerships with annual gross receipts for the three prior tax years of $5 million or less.

Question

Quizplus · Accepted Answer

The statement is false. While partnerships with C corporation partners are generally required to use the accrual method, there are exceptions. One such exception is for partnerships with annual gross receipts of $5 million or less in each of the prior three years, which may use the cash method.

A Partnership with a C Corporation Partner Must Always Use