An accrual-basis taxpayer is allowed to deduct expenses when they meet either the economic performance test or the all-events test. True False

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A: In this question, we have to show the effect of signing the note and the receipt.

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.