Also found this:
Reg §1.1374-4 (d) Section 481(a) adjustments
(1) In general. Any section 481(a) adjustment taken into account in the recognition period is recognized built-in gain or loss to the extent the adjustment relates to items attributable to periods before the beginning of the recognition period under the principles for determining recognized built-in gain or loss in this section. The principles for determining recognized built-in gain or loss in this section include, for example, the accrual method rule under paragraph (b) of this section.
Using the information in the OP, if taxpayer elects S status in same year they convert to accrual, the $1 million of A/R will be recognized over 4-years as a 481 adjustment. The recognized built in gain related to the A/R is the same $250K/year, subject to the taxable income limitation.