Which of the Following Is a True Statement About Impermissible

question 75

Multiple Choice

Which of the following is a true statement about impermissible accounting methods?

• A)An impermissible method is adopted by using the method to report results for two consecutive years.
• B)An impermissible method may never be used by a taxpayer.
• C)Cash-method accounting is an impermissible method for partnerships and Subchapter S- electing corporations.
• D)There is no accounting method that is impermissible.
• E)None of the choices are true.

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Definitions:

Anchoring Bias

A cognitive bias where an individual depends too heavily on an initial piece of information (the "anchor") when making decisions.

Escalating Commitment

A behavioral pattern where an individual or organization continues to follow a failing course of action due to emotional attachment or the desire to justify prior investments.

Heuristics

Mental shortcuts or rules of thumb that simplify decision making by reducing complex problem-solving to simpler judgment processes.

Cost-benefit Impact

An assessment that compares the costs involved in an action to the benefits derived from it, used to determine its overall value and feasibility.