Which of the following statements is INCORRECT regarding the requirements to meet the economic performance test under the various ways a liability can arise?

Multiple choice question.

Certain liabilities, such as rebates, refunds, and workers compensation payments, can be deducted when incurred regardless of when payment is made.

When a business agrees to pay another party for services, the deduction is taken as the other party provides the services.

When a business agrees to provide services to another party, the expenses incurred are deducted as the service is provided or costs incurred.

When a business prepays on a lease or rental agreement, the deduction is allocated over the rental period.