The Following Entities Are Not Involved in the Farming or Timber

question 42

Multiple Choice

The following entities are not involved in the farming or timber business; which of them may not use the cash method of accounting?

• A)An S corporation with average annual gross receipts of $8 million
• B)A partnership with average annual gross receipts of $12 million
• C)A regular C corporation with average annual gross receipts of $10 million
• D)A regular C corporation with average annual gross receipts of $4 million
• E)More than one of the above.

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Definitions:

Plant Expansion

The process of increasing the capacity of an existing factory or plant, often involving investments in equipment, technology, or additional space.

Retained Earnings

Accumulated net income left over for a company after it has paid out dividends to its shareholders.

Prior Period Adjustment

Adjustments made to the financial statements of a prior period to correct an error or to account for a retroactive application of new accounting policies.

Retained Earnings

The share of a company's earnings that are held back and not distributed as dividends to its shareholders.