The U.S. IRS has published a practice unit on Accounting Method Basics. The general overview of the practice unit includes the following:
This unit provides an overview of basic accounting method concepts under IRC 446 that apply to all taxpayers.
A taxpayer computes taxable income under the method of accounting regularly used in keeping its books. A "method of accounting" is not defined by the Code or the regulations. In general, a method of accounting is a set of rules under which a tax…