WFO Corporation has gross receipts according to the following schedule:
If WFO began business as a cash-method corporation in Year 1, in which year would it have first been required to use the accrual method?

Question

WFO Corporation has gross receipts according to the following schedule: 
If WFO began business as a cash-method corporation in Year 1, in which year would it have first been required to use the accrual method?

Quizplus · Accepted Answer

According to the gross receipts schedule, WFO Corporation had $25 million or more in average annual gross receipts for the three-year period ending in Year 5. Therefore, it would have been required to use the accrual method starting in Year 6, as per the IRS rules.

WFO Corporation Has Gross Receipts According to the Following Schedule