On December 19,2017,Logo Inc.,an accrual basis corporation,accrued $50,000 compensation expense for a routine year-end bonus payable to Mr.Craig,who is Logo's CFO.Logo paid the $50,000 to Mr.Craig on April 25,2018.Which of the following statements is true?
A) If Mr.Craig and Logo are not related parties,Logo can deduct the accrued expense in 2017.
B) If Mr.Craig and Logo are related parties,Mr.Craig must include his $50,000 bonus in 2017 gross income.
C) Regardless of whether Logo and Mr.Craig are related parties,Logo can't deduct the accrued compensation expense in 2017.
D) If Mr.Craig and Logo are not related parties,Mr.Craig can elect to include the $50,000 bonus in gross income in either 2017 or 2018.
Correct Answer:
Verified
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