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 your answer is zero, enter "0". Enter negative values as negative numbers.
Homework Answers
| item | cash basis | accrual basis |
| a. | -1000 | 0 |
| b. | 0 | 5,000 |
| c. | 0 | -250 |
| d. | 3000 | 0 |
| e. | -10,000 | 0 |
| f. | 0 | -500 |
cash basis is only concerned whether cash is paid or received and is not concerned with matching of a period's revenues with its expenses.
accrual basis is concerned with matching a period's revenues with its expenses and not with actual cash receipts or payments.
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Brief Exercise 3-29 Accrual- and Cash-Basis Accounting
The following are several transactions for Halpin Advertising
Company....
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