Which of the following statements is true regarding inventory and accounting methods?

Companies using cash accounting report income in the period it is earned, whether the payment is received then or not. Businesses with average annual gross receipts over $$26$ million are never required to keep inventory.

Businesses that keep an inventory must use the cash accounting method for that inventory.

Qualifying small businesses are exempt from the requirement to keep inventories under the Tax Cuts and Jobs Act.

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