Which of the following statements is always true regarding accounting methods available to a partnership? A) If a partnership has a partner that is a personal service corporation, it cannot use the cash method. B) If a partnership is a tax shelter, it can use the cash method of accounting. C) If a partnership has a partner that is a C corporation, it cannot use the cash method. D) If a nontax-shelter partnership had average annual gross receipts of less than $26,000,000 (2021) for the last three tax years, it can use the cash method.
Which of the following statements is always true regarding accounting methods available to a partnership? A) If a partnership has a partner that is a personal service corporation, it cannot use the cash method. B) If a partnership is a tax shelter, it can use the cash method of accounting. C) If a partnership has a partner that is a C corporation, it cannot use the cash method. D) If a nontax-shelter partnership had average annual gross receipts of less than $26,000,000 (2021) for the last three tax years, it can use the cash method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following statements is always true regarding accounting methods available to a partnership?
A) If a partnership has a partner that is a personal service corporation, it cannot use the cash method.
B) If a partnership is a tax shelter, it can use the cash method of accounting.
C) If a partnership has a partner that is a C corporation, it cannot use the
cash method.
D) If a nontax-shelter partnership had average annual gross receipts of less than $26,000,000 (2021) for the last three tax years, it can use the cash method.
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