Prior Corp

question 95

Multiple Choice

Prior Corp.plans to change its method of accounting for supplies.Both the old and new methods are acceptable.Which of the following statements is correct regarding the change?

• A)The taxpayer will need to amend prior returns to reflect the new method.
• B)The taxpayer will report the full amount of change in the current tax return.
• C)The taxpayer will report the net adjustment over four years.
• D)The taxpayer will report the net adjustment and pay the tax when it files the Form 3115.

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Definitions:

Depositary Bank

A financial institution that holds and manages securities for its clients, facilitating the trading of these securities.

Payor Bank

The bank that is directed by a check or draft to pay a certain amount of money to the person or entity named on the check.

On-Us Item

A banking term referring to a check or draft that is presented for payment by the same bank upon which it is drawn.

Stale Check

A check that is not presented to a bank within six months of its date.