specail purpose frameworks

Question 1

Which of the following statements about the cash basis of determining taxable income is true?

A.
There is no current deduction for capital expenditures.

B.
An item is included in gross income for the year in which it is earned.

C.
A deduction can be recognized when all the events have occurred to create the liability, and the amount of the liability can be determined with reasonable accuracy.

D.
None of the answer choices is a true statement regarding the case method.

Answer 1

Under any basis of accounting for income taxes, expenses are deductible only when paid or accrued. There is no current deduction for capital expenditures. The expense for capital expenditures will be recognized in the form of depreciation, amortization or depletion