Which of the following statements regarding accounting methods is false? A. A C corporation with gross receipts of more than $5 million per year must use the cash method of accounting. B. A sole proprietorship may generally use the cash receipts and disbursements method of accounting unless the business maintains inventory, and gross receipts for the three prior tax periods averages $29 million or less in 2023 ($27 million in 2022 and $26 million in 2019, 2020 and 2021). C. A limited liability company may use the cash method of accounting unless it has elected to be taxed as a corporation, in which its method of accounting may be restricted. D. An S corporation may use the cash method of accounting unless it maintains inventory, and gross receipts for the three prior tax periods averages $29 million or less in 2023 ($27 million in 2022 and $26 million in 2019, 2020 and 2021.
Which of the following statements regarding accounting methods is false?
A. A C corporation with gross receipts of more than $5 million per year must use the cash method of accounting.
B. A sole proprietorship may generally use the cash receipts and disbursements method of accounting unless the business maintains inventory, and gross receipts for the three prior tax periods averages $29 million or less in 2023 ($27 million in 2022 and $26 million in 2019, 2020 and 2021).
C. A limited liability company may use the cash method of accounting unless it has elected to be taxed as a corporation, in which its method of accounting may be restricted.
D. An S corporation may use the cash method of accounting unless it maintains inventory, and gross receipts for the three prior tax periods averages $29 million or less in 2023 ($27 million in 2022 and $26 million in 2019, 2020 and 2021.
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