Indicate Which of the Following Statements Is/are Correct

question 12

Multiple Choice

Indicate which of the following statements is/are correct:
I.A cash basis taxpayer may deduct prepaid rent if it will be used-up within one year of prepayment and the payment is required to be made.
II.An accrual basis taxpayer must satisfy an all-events test and an economic performance test to claim a deduction.
​

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

---

Definitions:

Risk Averse

This term describes individuals or organizations that prefer to minimize risks, often opting for safer, more predictable outcomes.

Z Problem-solving Model

A methodological approach to problem-solving that involves examining issues from multiple perspectives to find sustainable solutions.

Nonpreferences

The absence of a preference or inclination towards one option over another, often resulting in indecision or a neutral stance.

Preferences

An individual's selective liking or desire for one or more choices over others.