Which of the Following Is a True Statement About Impermissible

question 8

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:

Productive Efficiency

A situation where a good or service is produced at the lowest possible cost.

Allocative Efficiency

A state of the economy in which resources are allocated in a way that maximizes the total benefit to society.

Collusive Oligopoly

A market structure where a few firms dominating the market agree to set prices or output levels, reducing competition and maximizing collective profits.

Limit Pricing

A strategy where a firm sets the price of its products low enough to discourage new competitors from entering the market.