Homework Answers
ANSWER- OPTION A- IF PAYMENT IS RECEIVED AT THE SAME TIME A SERVICE IS PRODUCED AND SOLD, THERE IS NO DIFFERENCE BETWEEN HOW CASH AND ACCRUAL ACCOUNTING RECORD THE TRANSACTION.
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Which of the following statements about cash basis accounting and accrual basis accounting is correct? Multiple...
1. A company issues $20 million in new stock. The company later uses this money to...
1. A company issues $20 million in new stock. The company later uses this money to acquire a building. What is the resulting effect of these transactions on the accounts? A. Cash increases, Building increases, and Contributed Capital increases. B. Cash decreases, Building increases, and Contributed Capital decreases. C. Building increases, and Contributed Capital increases. D. Building increases, and Contributed Capital decreases. 2. A Company has $15,000 of retained earnings, $26,000 of assets, and $6,000 of liabilities. How much is...
Which of the following statements is true of accrual basis accounting?
Which of the following statements is true of accrual basis accounting? Accrual basis accounting records revenue only when cash is received. Accrual basis accounting always results in greater net income than cash basis accounting. Accrual basis accounting records expenses only when cash has been paid for them. Accrual basis accounting is required by Generally Accepted Accounting Principles (GAAP).
Accrual- and Cash-Basis Accounting The following are several transactions for Halpin Advertising Company. a. Purchased $1,000...
Accrual- and Cash-Basis Accounting The following are several transactions for Halpin Advertising Company. a. Purchased $1,000 of supplies. b. Sold $5,000 of advertising services, on account, to customers. c. Used $250 of supplies. d. Collected $3,000 from customers in payment of their accounts. e. Purchased equipment for $10,000 cash. f. Recorded $500 depreciation on the equipment for the current period. Required: Identify the effect, if any, that each of the above transactions would have on net income under cash-basis accounting...
1. Match each term associated with accrual-basis and cash-basis accounting with its most appropriate description. Accru...
1. Match each term associated with accrual-basis and cash-basis accounting with its most appropriate description. Accrual-basis expense Accrual-basis revenue Revenue recognition principle Cause-and-effect Cash basis revenue Cash-basis expense Match each of the options above to the items below. A company pays cash for supplies in May and uses those supplies in June. The expense is recorded in May. A company pays cash for supplies in May and uses those supplies in June. The expense is recorded in June A company...
Brief Exercise 3-29 Accrual- and Cash-Basis Accounting The following are several transactions for Halpin Advertising Company....
Brief Exercise 3-29 Accrual- and Cash-Basis Accounting The following are several transactions for Halpin Advertising Company. Purchased $1,000 of supplies. Sold $5,000 of advertising services, on account, to customers. Used $250 of supplies. Collected $3,000 from customers in payment of their accounts. Purchased equipment for $10,000 cash. Recorded $500 depreciation on the equipment for the current period. Identify the effect, if any, that each of the above transactions would have on net income under cash-basis accounting and accrual-basis accounting. If...
Problem 3-2A Convert cash-basis accounting to accrual-basis accounting (LO3-1, 3-2) Minutemen Law Services maintains its books...
Problem 3-2A Convert cash-basis accounting to accrual-basis accounting (LO3-1, 3-2) Minutemen Law Services maintains its books using cash-basis accounting. However, the company decides to borrow $100,000 from a local bank, and the bank requires Minutemen to provide annual financial statements prepared using accrual basis accounting as part of the credit worthiness verification. During 2021, the company records the following cash flows: $61,000 Cash collected from customers Cash paid for: Salaries Supplies Rent Insurance Utilities Net cash flows $35, 100 3,100...
1) If a company is using accrual basis accounting, when should it record revenue? A) when...
1) If a company is using accrual basis accounting, when should it record revenue? A) when cash is received, even though services may be performed at a later date B) when services are performed, even though cash may be received at a later date C) before services are performed D) when cash is received, 30 days after the completion of the services 2) When does a company account for revenue if it uses cash basis accounting? A) when services are...
solve all these problem please thank you 9. Under accrual basis of accounting, when an organization...
solve all these problem please
thank you
9. Under accrual basis of accounting, when an organization owes sales taxes to the government, then the organization will debit it's sales taxes expense account and balance this transaction with a credit to this account. 10. Under cash basis of accounting, when an organization receives it's power bill and pays, the organization will credit the cash account and balance it with a debit to this account. 11. Under accrual basis of accounting, when...
Which of the following statements are true under the accrual basis of accounting?
Which of the following statements are true under the accrual basis of accounting? Expenditures for expenses that benefit future periods are initially recorded as assetsDividends paid reduce income for the year.Revenue is recognized when performance is complete and collection is reasonably assured.Making sales near the end of the year that are not delivered by the end of the year will increase reported income for the year.Revenue is only recognized when cash is received since there is uncertainty until collection occurs.Expenses are...
#9 of 20 Which of the following statements regarding the cash basis of accounting is true?...
#9 of 20 Which of the following statements regarding the cash basis of accounting is true? O a. Expenses are reported in the same period as the revenues to which they relate. O b. The cash basis of accounting is used by most large businesses to provide accurate financial statements for users. O c. Revenues are reported in the period in which cash is received, and expenses are reported when cash is paid out. O d. Revenues are reported in...
Accrual- and Cash-Basis Accounting The following are several transactions for Halpin Advertising Company. a. Purchased $1,000 of supplies. b. Sold $5,000 of advertising services, on account, to customers. c. Used $250 of supplies. d. Collected $3,000 from customers in payment of their accounts. e. Purchased equipment for $10,000 cash. f. Recorded $500 depreciation on the equipment for the current period. Required: Identify the effect, if any, that each of the above transactions would have on net income under cash-basis accounting...
Problem 3-2A Convert cash-basis accounting to accrual-basis accounting (LO3-1, 3-2) Minutemen Law Services maintains its books using cash-basis accounting. However, the company decides to borrow $100,000 from a local bank, and the bank requires Minutemen to provide annual financial statements prepared using accrual basis accounting as part of the credit worthiness verification. During 2021, the company records the following cash flows: $61,000 Cash collected from customers Cash paid for: Salaries Supplies Rent Insurance Utilities Net cash flows $35, 100 3,100...
1) If a company is using accrual basis accounting, when should it record revenue? A) when cash is received, even though services may be performed at a later date B) when services are performed, even though cash may be received at a later date C) before services are performed D) when cash is received, 30 days after the completion of the services 2) When does a company account for revenue if it uses cash basis accounting? A) when services are...
solve all these problem please
thank you
9. Under accrual basis of accounting, when an organization owes sales taxes to the government, then the organization will debit it's sales taxes expense account and balance this transaction with a credit to this account. 10. Under cash basis of accounting, when an organization receives it's power bill and pays, the organization will credit the cash account and balance it with a debit to this account. 11. Under accrual basis of accounting, when...
#9 of 20 Which of the following statements regarding the cash basis of accounting is true? O a. Expenses are reported in the same period as the revenues to which they relate. O b. The cash basis of accounting is used by most large businesses to provide accurate financial statements for users. O c. Revenues are reported in the period in which cash is received, and expenses are reported when cash is paid out. O d. Revenues are reported in...
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