Which of the Following Must Use the Accrual Method of Accounting

question 62

Multiple Choice

Which of the following must use the accrual method of accounting? I.
A property management company, operating as a C corporation, 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:

Breeding Fees

Charges paid for the service of breeding animals, typically involving purebred animals in agricultural or sporting contexts.

Civil Litigation

The process of resolving private disputes through the court system, as opposed to criminal proceedings.

Company Parking Lot

A designated area where employees and visitors can park their vehicles while at a business premises.

Prejudicial Error

An error that affects the outcome of a case or legal proceeding, leading to an unfair advantage or disadvantage.