Which of the Following Statements Is Always True Regarding Accounting

question 24

Multiple Choice

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 non­tax­shelter 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.
• E) All of the above statements are false.

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Definitions:

Consumption Bundle

A combination of various goods and services that an individual consumes over a given period.

Preferences

The subjective tastes and priorities of consumers, influencing their choices among different goods, services, or outcomes.

Income

The total sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings received over a certain period of time.

Convex Preferences

A preference structure in consumer theory where combinations of goods are preferred over single goods, indicating a love for diversification.