An Exception to the Economic Performance Test Allows the Deduction

Multiple Choice

An exception to the economic performance test allows the deduction of year-end accruals if
I.The liability exists and the amount of the liability can be reasonably estimated.
II.Economic performance occurs within the shorter of 8 1/2 months after the close of the tax year or a reasonable time after the close of the tax year
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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.