Homework Answers
Accrual Basis :
| Date | Account Titles | Debit | Credit |
| $ | $ | ||
| Oct 15 | Accounts Receivable | 1,000 | |
| Legal Fees Earned | 1,000 | ||
| Nov 15 | Cash | 1,000 | |
| Accounts Receivable | 1,000 |
Cash Basis:
| Date | Account Titles | Debit | Credit |
| $ | $ | ||
| Oct 15 | No journal entry required | 0 | 0 |
| Nov 15 | Cash | 1,000 | |
| Legal Fees Earned | 1,000 |
In cash basis, there are no receivables or payables. In cash basis, revenue is recognized on receipt of cash. Hence there is no income in October, while there is $ 1,000 of income for November.
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