Under the accrual method of accounting,the two tests to determine when income must be reported and expenses deducted are the all-events test and the economic performance test.

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This statement is true. Under the accrual method of accounting, income must be reported and expenses deducted in the period they are earned or incurred, which is determined by the all-events test and the economic performance test. The all-events test determines whether all the events have occurred to establish the fact of liability for income or expenses, and the economic performance test determines when the income or expense must be recognized for tax purposes.

Under the Accrual Method of Accounting,the Two Tests to Determine