Which of the Following Statements Is Always True Regarding Accounting

question 11

Multiple Choice

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

• A)If a partnership is a tax shelter, it can use the cash method of accounting.
• B)If a non-tax-shelter partnership had "average annual gross receipts" of $3 million in all prior years, it can use the cash method.
• C)If a partnership has a partner that is a personal service corporation, it cannot use the cash method.
• D)If a partnership has a partner that is a C corporation, it cannot use the cash method.
• E)All of the above statements are false.

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Definitions:

Defense Spending

Government expenditure on military forces and activities, including salaries, equipment, construction, and research and development.

Means of Production

The facilities, resources, and tools used to produce goods and services in an economy, often discussed in Marxist economic theories.

Economic Role

The function or position that an entity (such as an individual, firm, or government) plays within the larger economic system.

Personal Income Tax

A tax levied on individuals' earned income, including wages, salaries, and other earnings, differentiated by factors such as level of income, marital status, and others.