The main provisions governing the computation of profits generally apply to professions and vocations as they apply to trades1.
Unless an election has been made to use the cash basis2, the profits of a trade must be calculated in accordance with generally accepted accounting practice, subject to any adjustment required or authorised by law in calculating profits for income tax purposes3. The courts generally have accepted that commercial accounting has a primary and important role to play in computing taxable trading profits but that the final determination of profit is a decision left to judges4.
Generally accepted accounting practice (GAAP) refers
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