Which of the Following Must Use the Accrual Method of Accounting

question 37

Multiple Choice

Which of the following must use the accrual method of accounting? I. An incorporated property management company with average annual gross receipts of $50 million. II. An incorporated law firm with average annual gross receipts of $6 million. III. An unincorporated grocery store with average annual gross receipts of $1,200,000.

• A)All of the above must use the accrual method.
• B)None of the above must use the accrual method.
• C)Only I and II must use the accrual method.
• D)Only I and III must use the accrual method.
• E)Only III must use the accrual method.

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Definitions:

Equilibrium Wage

The wage rate at which the quantity of labor supplied by workers equals the quantity of labor demanded by employers, resulting in a stable labor market.

Illegal Immigrants

Individuals who enter or reside in a country without legal permission or overstay their authorized period.

Labor Market

A marketplace in which employers find workers and workers find jobs; this market is influenced by supply and demand for labor, skills required, and wage levels.

Equilibrium Wage

The wage rate at which the quantity of labor demanded equals the quantity of labor supplied in the market, leading to a stable employment situation.