Murray Inc., a calendar year, accrual basis corporation, accrued $946,000 accrued salary and wage expense at the end of 2012. Murray paid the entire amount of the accrued liability on January 13, 2013. Murray can deduct the entire $946,000 accrued expense in 2012.

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Accrued expenses can be deducted in the year they are accrued, even if they are paid in the following year. Therefore, Murray Inc. can deduct the entire $946,000 in 2012 since it was accrued at the end of that year.