Final answer:
The statement about prepaid expenses needing to be mandatory for a deduction under the one-year rule is false; the rule focuses on the benefit period of the expense.
Step-by-step explanation:
The one-year rule for prepaid expenses in accounting states that prepaid expenses for services or benefits that extend beyond the current tax year can still be deducted in the current year as long as the benefit does not extend beyond the earlier of 12 months after the first date of the benefit, or the end of the tax year following the year of payment. Therefore, the statement "Prepaid expenses must be mandatory in order to qualify for a deduction under the one-year rule" is False. The one-year rule does not require prepaid expenses to be mandatory; instead, it focuses on the time period in which the expense provides benefit.