Tabco Inc., a calendar year, accrual basis corporation, accrued $48,800 wage and salary expense and a corresponding liability at the end of 2013. How much of the accrued expense is deductible in 2013?

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Quizplus · Accepted Answer

Under the accrual method, expenses are deductible in the year they are incurred if they are paid within 2.5 months after the end of the tax year. Therefore, the amount paid by March 15, 2014, is deductible in 2013.

Tabco Inc, a Calendar Year, Accrual Basis Corporation, Accrued $48,800 Wage