As a new taxpayer, a farm or ranch corporation may elect the cash or accrual methods of accounting if the corporate books are so kept and the method clearly reflects income. Indeed, IRS has ruled that a corporation may report on the cash method of accounting even though books are kept on the accrual method if the corporation maintains work papers reconciling accrual method book income to cash method taxable income. The method of accounting should be elected clearly on the initial corporate income tax return.