Due to a shortage of cash, East Coast Entertainment Company, an accrual basis taxpayer, could not pay its November 2014 utility bill on time. In February of 2015, East Coast Entertainment pays the utility bill. I. East Coast can deduct the expense on either its 2014 or 2015 tax return. II. East Coast cannot deduct the utility expense in 2014 because it is paid in 2015.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.
Correct Answer:
Verified
Q101: Electronic City sells various electronic products. With
Q102: In which of the following circumstances would
Q104: Amy borrowed $25,000 for her business from
Q106: Christy purchases $1,000-worth of supplies from a
Q107: Harold, a cash basis taxpayer, borrows $65,000
Q113: Jenny, an individual cash basis taxpayer, has
Q114: Sergio purchases $3,000-worth of supplies from a
Q116: Angela is an accrual basis taxpayer. On
Q118: Indicate which of the following statements is/are
Q120: An exception to the economic performance test
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents