Which of the Following Businesses Must Use the Accrual Method

question 49

Multiple Choice

Which of the following businesses must use the accrual method of accounting?
I.Champion Mortgage Corporation,which has annual gross receipts of $10,000,000.
II.The Happy Bookworm,a local bookstore with annual gross receipts of $950,000.
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• 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:

Essential Nature

Refers to the inherent, fundamental qualities or characteristics that define something or someone.

Funeral Expenses

Represent the costs associated with the services, products, and preparations for a person's burial or cremation.

Necessaries

Goods and services that are essential to a minor’s health and welfare.

Emancipated

In contract law, the condition that exists when minors are no longer under the control of their parents and are responsible for their contracts.