Which One of the Following Entities Cannot Use the Cash

question 56

Multiple Choice

Which one of the following entities cannot use the cash method for tax purposes?

• A)A large almond farm with $40 million in gross receipts.
• B)A continuing education provider with $20 million in gross receipts and 200 employees.
• C)A law firm operating as a personal service corporation with $5.4 million in gross receipts.
• D)A small sole proprietorship with $150,000 in gross receipts.
• E)All of the above may use the cash method.

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Definitions:

Consumer Price Index

A metric that analyzes the weighted average cost of a selection of consumer goods and services, such as medical care, transportation, and food, to measure inflation.

Short-Run Aggregate Supply

Represents the total supply of goods and services that firms in an economy plan on selling during a short-term period, given the level of prices.

Long-Run Aggregate Supply

Represents the total output an economy can produce when both capital and labor are fully employed, assuming constant technology and resources.

Real GDP

The total value of goods and services produced in a country, adjusted for inflation or deflation, providing a more accurate measure of economic output.