Question

Under the _________ method, a taxpayer generally reports income in the tax year they earn it, regardless of when payment is received. The taxpayer deducts expenses in the tax year they incur them, regardless of when payment is made.

Answer 1

Under the accrual method, a taxpayer reports income in the tax year they earn it, and deducts expenses in the tax year they incur them.

Step-by-step explanation:

Under the accrual method, a taxpayer generally reports income in the tax year they earn it, regardless of when payment is received. The taxpayer deducts expenses in the tax year they incur them, regardless of when payment is made.