Sergio Purchases $3,000-Worth of Supplies from a Local Vendor

question 63

Multiple Choice

Sergio purchases $3,000-worth of supplies from a local vendor.The supplies are delivered on April 1,2016.The supplies are fully used up on December 31,2016.Because of unusual circumstances,a bill for the supplies arrives from the vendor on February 1,2017,and is promptly paid.When can Sergio deduct the expenses?
I.In 2016,if he is an accrual basis taxpayer.
II.In 2016,if he is a cash basis taxpayer.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Misleading Advertising

Misleading advertising refers to marketing material that deceives or is likely to deceive, and can significantly alter a consumer's economic behavior.

Class Action

A class action is a lawsuit filed by one or more plaintiffs on behalf of a larger group of people who are similarly affected, to address issues common to the entire class.

Physical Presence

The actual, bodily existence of a person or entity in a specific location at a given time.

Internet Sales

Refers to the process of buying and selling goods or services using the internet as the main medium of commerce.