Franklin Company Began Business in 2010 and Has Consistently Used

question 57

True/False

Franklin Company began business in 2010 and has consistently used the cash method to report income from the sale of inventory in income tax returns filed for 2010 through 2014.As a result of an audit by the IRS,Franklin was required to change to the accrual method of accounting beginning with 2015.The net adjustment due to the change is a positive adjustment to income.The adjustment may be spread equally over 2015 and the three following years.

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Definitions:

Limbic System

is a complex system of nerves and networks in the brain, involved with instinct and mood. It controls basic emotions and drives.

Somatic Nervous System

A part of the peripheral nervous system that controls voluntary movements of the body through the innervation of skeletal muscles and mediates sensory information.

Sympathetic

Refers to the part of the autonomic nervous system that often prepares the body for rapid action in stressful situations, involving responses like accelerated heart rate and increased blood pressure.

Parasympathetic

The part of the autonomic nervous system responsible for rest and digestion, counterbalancing the sympathetic system.