I have a new S-corp client whose previous accountant reported Sch L Balance sheet on accrual basis and Page 1 Income on cash basis and checked the accrual box for accounting method. Do I need to file Form 3115 to change accounting method to cash even though he has always reported income on cash basis? Or can I simply file Sch L on cash basis going forward and check the cash method box? Difference between cash and accrual was plugged to distribution in the past to balance the return. Client keeps books on cash basis and he's not sure where previous accountant got accrual info from.
