Which of the Following Taxpayers Is Required to Use the Accrual

question 17

Multiple Choice

Which of the following taxpayers is required to use the accrual method of accounting?

• A)A retail business with average annual gross receipts of $800,000.
• B)A medical doctor with average annual gross receipts of $2 million.
• C)An insurance agency with average annual gross receipts of $2 million.
• D)All of the above are required to use the accrual method.
• E)None of the above is required to use the accrual method.

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Definitions:

Relational Orientation

An approach in business and marketing that emphasizes building long-term relationships with customers, focusing on customer satisfaction, loyalty, and engagement.

Lifetime Profitability

The total profit expected from a customer over the entire period of their relationship with a company.

Sales-oriented

A business approach that focuses primarily on making sales or transactions, often prioritizing volume over customer relationship or product quality.

Inventory Level

The quantity of goods or materials held in stock by a business at any given time.