Method of accounting will clearly reflect taxable income

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Reference no: EM13866527

1) Linus Paper Company decided to close two small pulp mills in Conway, New Hampshire, and Corvallis, Oregon. Would these closings be reported in a separate section entitled "discontinued operation after income from continuing operations"? Discuss.

2) GAAP usually requires the use of accrual accounting to "fairly present" income. If the cash receipts and disbursements method of accounting will "clearly reflect" taxable income, why does this method not usually also "fairly present" income?

Reference no: EM13866527

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