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:

Constitution

The Constitution is a fundamental set of principles and laws that outlines the structure, powers, and duties of a government and the rights of its citizens, serving as the supreme legal authority within a country or organization.

Veto State Laws

A concept pertaining to the principle that the federal government, under certain conditions, can nullify or reject laws passed by state governments, although in practice, such federal veto power is not directly exercised over state laws but through the court system interpreting constitutionality.

James Madison

The fourth President of the United States, hailed as the "Father of the Constitution" for his pivotal role in drafting and promoting the U.S. Constitution and the Bill of Rights.

Congress

The legislature of the United States, consisting of two houses: the Senate and the House of Representatives, responsible for making federal laws.