One criterion which will permit a deduction for an expenditure by the accrual- basis taxpayer prior to economic performance is that either the amount is not material or the earlier accrual of the item results in a better matching of income and expense.

Question

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For accrual-basis taxpayers, deductions can be taken before economic performance if the amount is immaterial or if it results in better matching of income and expenses, aligning with the matching principle in accounting.

One Criterion Which Will Permit a Deduction for an Expenditure