BUSA427_Chapter13.docx - Chapter 13 Ch. 13: Question 31 The...

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Chapter 13Ch. 13: Question 31The following accounting period options are:a. Newly organized C corporation may select any tax year and can differ from theshareholders.b. Sole proprietorships must use the same period for business reporting as theyuse for personal purposes.c. Partnerships must use same tax year as that of its partners who have a majorityinterest. Since more information was not given, the following could also apply:If partners owning a majority interest have different tax years, partnershipmust adopt same tax year as that of its principal partners.Or, partnership must use a year that results in least aggregate deferral ofincome to partners.Also we do not know how long they have had the company, but if the naturalbusiness year pattern were to apply, it would exist when the taxpayer receives25% or more of its gross receipts in last two months of the selected tax year,and this pattern must repeat for three consecutive years. (IRS approval isautomatic.)

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Term
Fall
Professor
fabioambrosio
Tags
Accounting, Options, Generally Accepted Accounting Principles, Goods Sold, FIFO and LIFO accounting, Wash Company

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