Which of the Following Statements Is (Are) Correct?
I IComic Partnership Must Use a Calendar Year End,unless the IRS

question 21

Multiple Choice

Which of the following statements is (are) correct?
I.Critter Partnership may elect to use any of the three dates that the partners use.
II.Critter Partnership must use the tax year of the partner that creates the least amount of deferral.
a.Only statement I is correct.
b.Only statement II is correct.
c.Both statements are correct.
d.Neither statement is correct.
-Snoopy Corporation,Garfield Corporation,and Dogbert Corporation are partners in Comic Partnership.The partners' fiscal year ends and ownership interests follow:
$\begin{array}{lll}\text { Snoopy Corporation } & \text { March 31 FYE } & 15 \% \text { Interest } \\\text { Garfield Corporation } & \text { May 31 FYE } & 30 \% \text { Interest } \\\text { Dogbert Corporation } & \text { October 31 FYE } & 55 \% \text { Interest }\end{array}$
I.Comic Partnership must use a calendar year end,unless the IRS approves an election for a different tax year.
II.Comic Partnership must use a October 31 fiscal year end.

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Fair Value Option

An accounting approach allowing companies to choose to measure certain financial assets and liabilities at fair market prices.

Reporting Requirements

These refer to the specific guidelines or regulations that entities must follow when preparing and presenting their financial and operational information to regulatory bodies or the public.

Financial Statement Disclosures

Refers to the requirement for organizations to provide additional context, data, and explanations within their financial statements, helping stakeholders understand the financial health and decisions of the entity.

Equity Method

An accounting technique used by firms to account for their investments in other companies when they hold significant influence but not full control.