Which of the Following Is a True Statement About Impermissible

question 87

Multiple Choice

Which of the following is a true statement about impermissible accounting methods?

• A) An impermissible method is adopted by using the method to report results for two consecutive years.
• B) An impermissible method may never be used by a taxpayer.
• C) Cash method accounting is an impermissible method for partnerships and Subchapter S electing corporations.
• D) There is no accounting method that is impermissible.
• E) None of these is true.

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Definitions:

Flexible Budget

A budget that is adaptable and varies according to the changes in activity level or volume.

Net Operating Income

The profit generated from a company's core business operations, excluding deductions of taxes and interest.

Facility Expenses

Costs associated with the physical locations a business operates, including utilities, maintenance, and rent or mortgage payments.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, allowing for more accurate financial planning.