Which of the Following Taxpayers Is Required to Use the Accrual

question 58

Multiple Choice

Which of the following taxpayers is required to use the accrual method of accounting?

• A)A retail business with average annual gross receipts of $8,000,000.
• B)A medical doctor with average annual gross receipts of $2 million.
• C)An insurance agency with average annual gross receipts of $5 million.
• D)All of these are required to use the accrual method.
• E)None of these is required to use the accrual method.

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Definitions:

Workbook Problems

Exercises or assignments found in a workbook designed to practice or test understanding of a subject.

Term Papers

Research papers written by students over an academic term, accounting for a large part of a grade.

Utility Function

A mathematical representation of how consumer preferences are related to the consumption of goods and services.

Competitive Market

A market structure characterized by a large number of buyers and sellers, all of whom have minimal impact on the market price.