Which of the Following Partnerships Can Elect the Cash-Basis Method

question 36

Multiple Choice

Which of the following partnerships can elect the cash-basis method of accounting?

• A)a CPA firm with average revenues of $20 million
• B)a chocolate manufacturer with average revenues of $3 million
• C)a cleaning service partnership generating average revenues of $5.5 million whose partners are Joe,Larry and Smith Inc.
• D)None of the above.

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Definitions:

Price Ceiling

A government-imposed limit on how high a price can be charged for a product or service, intended to protect consumers.

Producer Surplus

Producer surplus is the difference between what producers are willing to accept for a good versus what they actually receive, typically due to market price.

Market Equilibrium

A state where market supply meets market demand, leading to stable prices and quantities.

Producer Surplus

The variance between what producers are prepared to sell a product or service for and the actual revenue they achieve.