For purposes of the accrual method of accounting,the economic performance test is met when
A)the property or services are actually provided.
B)the amount of the item can be reasonably estimated.
C)all events have occurred that establish the fact of a liability.
D)all events have occurred that fix the taxpayer's right to receive income.

Question

Quizplus · Accepted Answer

Economic performance occurs under the accrual method of accounting when property or services are actually provided, not when the liability is incurred or the income is earned. Therefore, option A is the correct answer. Option B relates to the realization test, Option C relates to liabilities, and Option D relates to income recognition, which are not relevant to the economic performance test.

For Purposes of the Accrual Method of Accounting,the Economic Performance