Question

LUID Playel)! assessmentkunld=65541460&context=exam&selected Languageld=2#/section/9312541627536/qu. utes remaining Loeng Industries had the following transactions during 2020: Sales of ¥420,000 on account Collected ¥260,000 for services to be performed in 2021 Paid \163,000 cash in salaries Purchased airline tickets for ¥45,000 in December for a trip to take place in 2021 What is Loeng's 2020 net income using cash basis accounting? Select one alternative: ¥52,000. ¥517,000 O ¥472,000. ¥97,000.

Answer 1

Answer:
In Cash basis accounting, revenue and expenses are recorded when cash is received and paid.

Revenue earned = ¥260,000
Expenses paid = ¥163,000 + ¥45,000
Expenses paid = ¥208,000

Net Income = Revenue – Expenses
Net Income = ¥260,000 - ¥208,000
Net Income = ¥52,000

Note:
Sales of ¥420,000 on account won’t be considered as no cash is received on sales.