Question

Which of the following statements regarding the accrual method of accounting is incorrect ?

A
A deposit that guarantees the customers payment of
amounts owed to the creditor is an advance payment.
B
An accrual basis taxpayer can deduct expenses owed to a
related cash basis taxpayer as soon as the expenses are
properly accrued even though the payment is not made
until a subsequent tax year.
C
Expenses are not deductible until all events have occurred
that determine the fact of the liability (including economic
performance).
D
Where the right to income is contingent on a future event,
an accrual basis taxpayer doesn't have to recognize the
income until that event occurs

Answer 1

Option C

Expenses are not deductible until all events are occured that determine the fact of liability (including economic performance)

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