Question

Which of the following is not required for an accrual method taxpayer to currently deduct the cost of services received?A) The liability must be paid.B) The existence of a liability must be established.C) The amount of the liability is determined with reasonable accuracy.D) The services must actually be provided.

Answer 1

Answer:

A) The liability must be paid

Explanation:

if the state or federal govermnet demand the payment of the liability then; the basis for taxation will bew a cash accounting not an accrual accounting.

The whole point of accrual accounting is to separate between the arise of an aobligation or the origin of a revneue from the payment or collection, respectively.