Chapter 18, Problem 45P

What accounting method (cash or accrual) would you recommend for the following businesses?

1. a. A gift shop with average annual gross receipts of $900,000.
2. b. An accounting partnership with average annual gross receipts of $12 million.
3. c. A drywall subcontractor who works on residences and has annual gross receipts of $3 million.
4. d. An incorporated insurance agency with average annual gross receipts of $28 million.
5. e. A sole proprietor operating a retail clothing store with average annual gross receipts of $12 million.
6. f. A sole proprietor operating a widget manufacturing plant with average annual gross receipts of $27 million.