P2-U02 · PART 2 · SOURCE CYCLE 2026-2027
Accounting Periods and Methods
How to complete this unit
This unit uses 15 source-gated recall cards and 19 admissible practice questions. Complete the sequence in order; the unreleased wiki prose remains outside the learner path.
- 1 · LearnBuild the rule
Answer each recall prompt before opening it. Then learn the exact rule, test the controlling facts through four quick challenges, explore common questions, and finish with one own-words teach-back.
- 2 · ApplyUse it in context
Complete at least 19 mapped questions over two sessions. Review the explanation even when the answer is correct.
- 3 · ProveTest readiness
Use the Part 2 mock under time pressure. Return here for every flagged or missed concept before the next attempt.
Verified recall questions
Only cards whose complete question and answer were checked against exact primary-authority evidence appear here. Stable unit ownership gathers this lesson across 1 textbook collection.
Q1.Alder receives a valid client check on December 30 but deposits it in January. When is it generally income?
In the year the valid check was received
Q2.Alder uses the accrual method. When is income generally reported?
In the year it is earned
Q3.Alder chooses a 12-month accounting period ending November 30. What type of tax year is this?
A fiscal tax year
Q4.Which form is filed to change the accounting method used for inventory?
Form 3115
Q5.When does a cash-method business generally include an income item?
When it is actually or constructively received during the tax year
Q6.A business must adopt its first tax year by:
The due date (not including extensions) for filing a return.
Q7.Raymond operates a retail clothing store using the accrual method and reports income on Schedule C, Net Profit or Loss from Business. He also runs a lawn care service that he operates only in the summer months. Which of the following statements is correct?
The lawn care business may use either the cash or accrual method, so long as both businesses have separate and distinct books and records.
Q8.Which of the following entities cannot use the cash method of accounting?
A tax shelter with average gross receipts of $2.5 million.
Q9.When a business is subject to the uniform capitalization rules, all of the following costs must be included in inventory except:
The cost of shipping a finished product to a customer.
Q10.Which of the following date ranges would be a permissible fiscal tax year?
July 1, 2025, to June 30, 2026
Q11.Harvest Haven Grocers, Inc. is a C Corporation. The corporation would like to request a change in its overall accounting method. Which form must the corporation file in order to request this change?
Form 3115
Q12.Penny operates a custom dress shop as a sole proprietor. She incurred the following expenses during the taxable year: Beginning Inventory Raw Materials: $5,000 Beginning Inventory Finished Dresses: $10,000 Ending Inventory Raw Materials: $6,250 Ending Inventory Finished Dresses: $4,700 Materials purchased: $17,500 Additional fabric used in finished dresses: $2,350 Advertising: $12,000 Freight-in on fabric: $300 Freight-out on Sale of Finished Dresses: $475 Calculate her cost of goods sold.
$24,200
Q13.Softie Sleeper, Inc., a mattress manufacturer, had the following expenses during the tax year: Beginning inventory: $80,000 Ending inventory: 52,500 Raw materials purchased: 12,000 Manufacturing costs: 80,000 Freight-in costs: 550 Freight-out to customers: 750 Calculate Softie Sleeper's cost of goods sold (COGS) for the year:
$120,050
Q14.Vargas Surgical Group, Inc., a C corporation, was organized on May 1, 2025. It elected the calendar year as its tax year. When is the first tax return due for Vargas Surgical for this short tax year?
April 15, 2026
Q15.When determining whether or not a business can use the cash method, normally how many years are used to determine average annual gross receipts?
Three years.
Ready to move on?
- ▸ Explain at least 80% of these 15 rules without opening the answer, twice on different days.
- ▸ Score 80% across 19 or more mapped questions over two sessions, not one memorized round.
- ▸ Complete a timed Part 2 mock and return to this unit if its concepts remain flagged or missed.
Use these checks to choose your next study action. They do not predict a PSI scaled score.