Homework Answers
Accrual basis accounting is the method of accounting where revenues and expenses are recorded when a transaction occurs rather than when payment is received or made respectively. In this method, revenues and expenses should be recognised in the same period - matching principle.
Calculation of Net Income for May.
Services provided (both in cash and on account) = $650+$500 = $1150.
May's rent bill = $300.
Net Income for May = $850 ($1150 - $300).
Answer - Option A $850.
Note : Please comment down for any further clarifications.
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