CPA Associates,a cash basis partnership with a calendar tax year,signs a contract for a 20-month subscription to an on-line tax research service,effective as of April 1.The firm pays the full $10,000 subscription bill on the April 1,2016 subscription start date.For 2016 the firm can deduct

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Under the cash basis accounting method, expenses are generally deductible in the year they are paid. Since CPA Associates paid the full $10,000 in 2016, they can deduct the entire amount in that year.

CPA Associates,a Cash Basis Partnership with a Calendar Tax Year,signs