Discussion question part 2

6. Newly commenced business, dissolution of business, change of accounting period by

corporate taxpayers, death of the taxpayer and termination of the accounting period of
the tax payer by the commissioner of internal revenue.
7. The general method: accrual basis- income is recognized earned regardless of when
received, cash basis – income is recognized earned and expenses is incurred when
there is a physical inflow and outflow of cash, installment method – gross income is
recognized and reported in proportion to the collection from the installment sales
and deferred payment method – a variant if the accrual basis and is used in
reporting income when a non-interest bearing note is received in consideration in a
sale (PV), percentage of completion method – gross income from construction is
reported based on the percentage of completion of the construction project,
outright method – the lessor may report as income the fair value of such building or
improvement subject to the lease at the time when it is completed and spread-out
method – the lessor may spread over the life of the lease the estimated depreciated
value of such buildings or improvements at the termination of the lease and reports
as income for each year of the lease an aliquot part thereof, and crop year basis –
farming income is recognized as the difference between the proceeds of the
harvests and expenses of the particular crop harvested.
8. Income tax returns and withholding tax returns, but information returns are also
required by the gov’t to the tax payers for tax mapping purposes.