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:

Iconic Memory

A type of visual sensory memory that holds an exact copy of the visual information it receives for a very short period of time.

Nonsense Syllables

Meaningless sets of letters used in psychological experiments to study memory and learning processes.

Hermann Ebbinghaus

A German psychologist best known for his pioneering work on the study of memory, including the forgetting curve and the spacing effect.

Ebbinghaus' Retention Curve

A graphical representation of the decline in memory retention over time, illustrating that memories diminish if not rehearsed.