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:

Contextual Relativism

Position 5 in Perry’s model that represents a major achievement in intellectual development because the student now possesses analytic abilities that allow her to appreciate the merits of diverse perspectives and to find convincing elements in multiple points of view. Thinking relativistically, or thinking about knowledge in context, becomes more habitual.

Absolute Truth

A fact or principle that is believed to be universally valid, independent of context or situation.

Intellectual Development

The growth and change in intellectual capabilities, such as learning, thinking, reasoning, and problem-solving.

Authority Figures

Individuals who hold power or control in social structures, typically held in high regard and expected to be obeyed and respected.