What Tax Year-End Must an Unincorporated Entity with Only One

question 67

Multiple Choice

What tax year-end must an unincorporated entity with only one owner adopt?

• A)The entity is free to adopt any tax year-end.
• B)The entity must adopt the same year-end as its owner.
• C)The entity must adopt a calendar year-end.
• D)The entity may adopt any year-end except for a calendar year-end.

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Definitions:

Operating Expenses

Costs associated with the day-to-day operations of a business, excluding direct costs of producing goods or services.

Cash Basis

An accounting method where revenue and expenses are recognized when cash is received or paid, rather than when earned or incurred.

External Reporting

The preparation and disclosure of financial statements and other information to parties outside the corporation, typically involving public companies.

Long-Term Assets

Assets that are expected to provide economic benefits beyond one year, including property, plant, equipment, and intangible assets.