TQK,LLC, Provides Consulting Services and Was Formed on 1/31/X5

question 121

Multiple Choice

TQK,LLC, provides consulting services and was formed on 1/31/X5. Aaron and ABC, Incorporated, each hold a 50percent capital and profits interest in TQK. If TQK averaged $29,000,000 in annual gross receipts over the last three years, what accounting method can TQK use for X9?

• A)Accrual method
• B)Cash method
• C)Hybrid method
• D)Accrual method or cash method

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Definitions:

Natural Monopoly

A type of monopoly that arises due to high fixed or start-up costs associated with the business, making it efficient for only one provider to serve the entire market.

Antitrust Law

Laws designed to promote competition and prevent monopolies by regulating corporate practices that restrict trade.

Product Price

The amount of money charged for a product, determined by costs, market demand, and competition.

Natural Monopoly

A market condition where a single firm can supply the entire market at a lower cost than any combination of two or more firms due to economies of scale.