This module delivers a core understanding of the tax treatment of prepaid and accrued expenses. The module centers around the All Events Test and the resulting need for m-1 adjustments. One of the key takeaways is knowledge of the Economic Performance rules and the 3.5-month safe harbor and recurring items exception. Prepaid expenses are analyzed and materials center around the application of the 12-month rule. This module is primarily delivered through instructor-led discussion, and it also includes two exercises and a case study that encourages thought, interaction, and participation from the class. Toward the end of the module, the focus shifts from accrued and prepaid expenses to deferred income.