Final answer:
The statement is true, as both partnerships and S corporations make entity-level accounting decisions and are pass-through entities for tax purposes.
Step-by-step explanation:
The statement is true. Both partnerships and S corporations are subject to entity-level decisions regarding their accounting periods and accounting method elections. Like partnerships, S corporations are considered pass-through entities, meaning income is passed through to the shareholders, who then report the income on their personal tax returns. The S corporation itself is not subject to federal income tax, although it may be responsible for state taxes or other specific federal taxes. This structure allows S corporations to avoid the double taxation that C corporations experience. However, unlike sole proprietorships or partnerships, S corporations can have up to 100 shareholders and benefit from limited liability protection.