A Partnership May Use the Cash Method Despite Having a Corporate

question 88

Multiple Choice

A partnership may use the cash method despite having a corporate partner when the partnership's average gross receipts for the prior three taxable years don't exceed ________.

• A)$5,000,000.
• B)$1,000,000.
• C)$25,000,000.
• D)Partnerships may never use the cash method if they have corporate partners.

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Definitions:

Accounts Payable

Amounts a company owes to creditors for goods or services bought on credit.

General Journal

A primary accounting record used to keep track of all financial transactions, listed in chronological order.

Overcharge Creditor

The act of charging a creditor more than the agreed amount or more than the fair price for goods or services.

Adjustment Recorded

The act of documenting changes to accounts to correct or update financial information.