Answer:
A home improvement store that just began business last year and had $2.7 million in gross receipts.
Explanation:
The IRS allows only a limited number of businesses to use cash basis accounting and in order to do so, the business must be:
- Partnership or C corporation with less than $5 million in total sales revenue per year
- Sole proprietorship or S corporation with less than $1 million in total sales revenue
- Cannot be a publicly traded corporation
- Personal service businesses with more than 95% of revenue specifically related to services.
- Family owned farms with total annual sales revenue less than $25 million.
Answer:
C, Taxes
Explanation:
Tax is the financial levy or charge imposed on an individual by the government to fund its expenditure.
When a product is purchased, the ownership cost of the product does not include tax because a product is not taxable. The income from the product is taxable but not the product itself.
So when purchasing a product, asides from value added taxes which has been included in the product price, there is no continuous tax payment on the product after its been paid for.
Cheers.
Answer: Overstated, no effect, Overstated
Explanation:.
Since there's a double counting, this will lead to the overstating of the inventory which brings about an increase in the asset.
On the other hand, there's no effect on the liability. Lastly, the stockholder's equity is overstated as well as there's an increase the net income due to the overstated inventory.
