Which of the Following Statements About Methods of Accounting Is

question 112

Multiple Choice

Which of the following statements about methods of accounting is false?

• A) The IRS has the right to determine if a taxpayer's method of accounting clearly reflects the taxpayer's income.
• B) A taxpayer must request permission from the IRS to change its method of accounting for tax purposes.
• C) A taxpayer engaged in more than one business can use a different method of accounting for each business.
• D) Taxpayers must use the same method of accounting to compute taxable income as they use to compute financial statement income.

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Definitions:

Discretionary Power

Authority granted to an individual or body to make decisions within certain guidelines without the need for explicit rules.

Administrative Tribunal

A specialized government body designed to resolve disputes in specific areas, such as employment, immigration, or social services, through a judicial-like process.

Natural Justice

The principles of fairness, including the right to a fair hearing and the rule against bias, applied in judicial and administrative decisions.

Successful Mediation

A process in which a neutral third party assists disputing parties in reaching a mutually agreeable solution, without needing litigation.