Which of the Following Statements Is True Regarding Accounting Methods

question 19

Multiple Choice

Which of the following statements is true regarding accounting methods available to a partnership?

• A) If a partnership is a tax shelter, it cannot use the accrual method of accounting.
• B) If a partnership has a personal service corporation as a partner, it cannot use the cash method.
• C) If a partnership has a partner that is a C corporation, it cannot use the cash method.
• D) If a partnership has a partner that is a C corporation, it must use the cash method.
• E) All of the above statements are false.