文档介绍：Chapter 11
Accounting Periods and Methods
Learning Objectives
Explain the rules for adopting and changing an accounting period
Explain the differences among cash, accrual, and hybrid accounting
Determine whether specific costs must be included in inventory
Learning Objectives
Determine the amount of e to be reported from a long-term pute the gain to be reported from an installment pute the amount of imputed interest in a transaction
Determine the tax treatment of duplications and omissions that result from changes of accounting methods
Accounting Periods
Required payments and fiscal years
Returns for periods of less than 12 months
May be required to file a short period return
Must annualize their taxable e
Accounting Periods
Generally need IRS approval to change accounting period
Business has to establish a substantial business purpose to change accounting period
IRS approval is not necessary
Conformity between newly married spouses
Change to a 52/53 week year ending in the same calendar month as the prior tax year
Certain corporation which have not changed accounting periods within 10 years
Overall Accounting Methods
Cash receipts and disbursements method
Accrual method
Hybrid method
Cash Receipts And Disbursements
Cash receipts and disbursements method
Report e for the tax year in which payments are received
Expenses deducted in the year paid
Most individuals and many service businesses use the cash method
Accrual Method
Report e and deduct expenses under the all-events and economic performance test
Taxpayer’s right to receive e and can be determined with reasonable accuracy
Accrual Method
Deduction is met when liability is established and the amount of expense can be determined with reasonable accuracy
Economic performance occurs when property or services are actually rendered by the other party
Hybrid Method
Use the accrual method for sales and purchases, but may use cash method for other e and expenses
Least used method