Which of the Following Statements Is True Regarding Changes in Accounting

question 32

Multiple Choice

Which of the following statements is true regarding changes in accounting methods?

• A)The treatment of a change in accounting method differs depending on who initiates the change.
• B)Adjustments arising from a voluntary change in accounting method are generally accounted for in the year of the change.
• C)Taxpayers who change from an incorrect method of accounting to a correct method of accounting are not required to obtain the consent of the IRS.
• D)Corrections due to errors are treated the same as changes in accounting methods.

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Definitions:

Corporate Management

The group of individuals responsible for directing, controlling, and administering an organization or company.

S-corp

is a type of corporation that meets specific Internal Revenue Code requirements, allowing it to pass income directly to shareholders and avoid double taxation.

C-corp

A type of corporation subject to corporate income tax, distinct from its owners, who are taxed separately on their personal income from the corporation.

Double Taxation

A situation where income or profits are taxed at two levels, typically once at the corporate level and again at the individual shareholder level.