Accrual Basis Books, Cash Basis Tax

[n1njah]

Hello, question for adjustments on 1120s: Schedule B method of accounting is checked as cash, books are kept on accrual basis. I assume you fill out Schedule L on accrual basis with cash basis tax adjustments on Schedule M-1? Subtracting receivables, adding back payables line by line? Or do the adjustments go somewhere else?

Thank you.

[George4Tacks]

Cash is the default. YOU are in charge and have ability to change that IF IT IS APPROPRIATE.

[n1njah]

Wouldn't you have to file form 3115 if you're changing that after the first year?

[George4Tacks]

Yes.

[n1njah]

Thank you