Which of the following is a true statement about accounting

Which of the following is a true statement about accounting for business activities?

Multiple Choice

An overall accounting method can only be adopted with the permission of the Commissioner.

An overall accounting method is determined by the IRS when the business applies for an employer identification number.

The cash method can only be adopted by individual taxpayers.

The accrual method can only be adopted by corporate taxpayers.

None of the choices are true.

Solution

None of the choices are true.

Accounting method for a business is neither determined by IRS nor with the permission of Commissioner. It is adopted when the entity files its first return. Individual taxpayers may file either using cash basis or accrual basis