For each transaction below, calculate the amount of expense to be recognized in the current period...
For each transaction below, calculate the amount of expense to be recognized in the current period using accrual-basis accounting:
a. Paid $3,300 on account for supplies purchased last period. All supplies were used last period.
Expense to be recognized:
b. Paid $5,900 cash for advertising for the current period.
Expense to be recognized:
c. Employees worked in the current period but will not be paid until the following period, $4,300.
Expense to be recognized:
Homework Answers
Answers
- a. Paid $3,300 on account for supplies purchased last period. All supplies were used last period.
Expense to be recognized: $ 3300, because expense will be equal to supplies used during the period which is $ 3300.
- b. Paid $5,900 cash for advertising for the current period.
Expense to be recognized = $ 5,900 as advertising expense will be for current period is equal to cash paid.
- c. Employees worked in the current period but will not be paid until the following period, $4,300.
Expense to be recognized: $ 4300. Even though the salaries are not paid yet, the expense gets ‘accrued’ under accrual method and will be recorded as an expense for the current period.
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