【正文】 . Generally, a partnership elects any tax year that ends on the last day of a calendar month and then the partners must change their tax years to be the same as the partnership. ANS: F Unless the business purpose requirement is satisfied, the partnership tax year is determined in accordance with the following sequence: ? The partnership tax year must be the same as the tax year of the majority interest partners. ? If there are no majority interest partners, the partnership must adopt the same tax year as its principal partners. ? If the principal partners do not all have the same tax year and there are no majority interest partners, the partnership must use a tax year that results in the least aggregate deferral of ine. Accounting Periods and Methods 165 PTS: 1 DIF: 1 REF: p. 164 | p. 165 OBJ: 1 NAT: AICPA FNReporting | AACSB Analytic MSC: 5 min 5. For purposes of determining the partnership’s tax year, there may be more than one principal partner. ANS: T PTS: 1 DIF: 1 REF: p. 164 OBJ: 1 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 6. The Seagull Partnership has three equal partners. Partner A’s tax year ends June 30th, and Partners B and C use a calendar year. If the partnership uses the calendar year to report its ine, when Partner A files his tax return for his tax year ending June 30, 2020, he will include his share of partnership ine for the period July 1, 2020 through June 30, 2020. ANS: F The partner reports his ine for the partnership tax year that ends with or within his tax year ending June 30, 2020. Thus, when Partner A files his tax return for his year ending June 30, 2020, he must report his share of the partnership ine for the calendar year 2020. PTS: 1 DIF: 1 REF: p. 164 | p. 165 OBJ: 1 NAT: AICPA FNReporting | AACSB Analytic MSC: 5 min 7. Red Corporation and Green Corporation are equal partners in the R amp。161 CHAPTER 16 ACCOUNTING PERIODS AND METHODS Instructor: The test items in both the print Test Bank and ExamView testcreation software are numbered by question type within each chapter. Thus, users of ExamView can more easily preview their selections using the printed Test Bank in the same numbering system. Learning Objective, Level of Difficulty, Estimated Time to Completion, and the AACSB’s and AICPA’s Core Competencies for each test item are located within the item itself. Status: Q/P Question/ Present in Prior Problem Topic Edition Edition TRUE OR FALSE 1 Tax year: personal service corporation Unchanged 1 2 Tax year: C corporation Unchanged 2 3 Tax year: S corporation Unchanged 3 4 Tax year: partnership Unchanged 4 5 Tax year: partnership and principal partner Unchanged 5 6 Tax year: partnership and majority interest partners New 7 Tax year: partnership and least aggregate deferral Unchanged 7 method 8 Tax year: PSC and natural business year New 9 Tax year: partnership business purpose Unchanged 9 10 Tax year: personal service corporation Unchanged 10 11 Short tax year Unchanged 11 12 Tax year: annualization New 13 Tax year: annualization Unchanged 13 14 Restoration of amounts received under a claim New of right 15 Accounting method: cash versus accrual New 16 Cash method: oneyear rule Unchanged 16 17 Electing an accounting method: multiple businesses Unchanged 17 18 Allevents test for deductions Unchanged 18 19 Accounting method: cash versus accrual Unchanged 19 20 Change in accounting method: 167。 G Partnership. Red Corporation’s tax year ends September 30th, and Green Corporation is a calendar year taxpayer. R amp。 481 adjustment. Since the change in accounting method is involuntary, a positive adjustment must be included in gross ine in the year of the change in accounting method. So the amount of the 167。S Partnership, which was formed on July 1, 2020. Gold uses a calendar tax year, and Silver’s tax year ends September 30. Gamp。S must use a tax year ending September 30th. d. Gamp。S must use a tax year ending June 30th. b. Gamp。 481 adjustment and $7,500 must be added to taxable ine for each year 2020, 2020, 2020, and 2020. Accounting Periods and Methods 169 ANS: T The positive 167。 1341, Ted is permitted to reduce the 2020 tax liability by the amount of the tax paid in 2020 on an amount that was subsequently determined to not be his ine. PTS: 1 DIF: 1 REF: p. 1610 OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 15. A disadvantage to using the accrual method of accounting, as pared to the cash method, is that under the accrual method the ine may be recognized before it is actually collected. ANS: T Under the accrual method, the ine must be recognized when the taxpayer has the right to receive the ine, whether or not the ine has actually been received. PTS: 1 DIF: 1 REF: p. 1613 OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 16. A new calendar year, cash basis corporation paid $12,000 for a 12month license on June 30, 2020. The corporation can deduct only $6,000 for the calendar year 2020. ANS: F Under the oneyear rule for prepaid expenses for cash basis taxpayers, the entire $12,000 can be deducted in the year paid. PTS: 1 DIF: 1 REF: p. 1612 OBJ: 2 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 168 2020 Comprehensive Volume/Test Bank 17. Alice, Inc., an S corporation, operates a retail clothing store and also owns rental property. The sales from the clothing store must be reported by the accrual basis, but the rental ine may be reported by the cash method, unless Alice previously elected the accrual method for rents. ANS: T PTS: 1 DIF: 1 REF: p. 1611 OBJ: 2 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 18. If it were not for