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

Multiple Choice

Sergio purchases $3,000-worth of supplies from a local vendor. The supplies are delivered on April 1, 2014. The supplies are fully used up on December 31, 2014. Because of unusual circumstances, a bill for the supplies arrives from the vendor on February 1, 2015, and is promptly paid. When can Sergio deduct the expenses? I. In 2014, if he is an accrual basis taxpayer. II. In 2014, if he is a cash basis taxpayer.

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