Suppose a company earned $100,000 this accounting period and has collected $80,000 of what it earned....

Question

Question

Suppose a company earned $100,000 this accounting period and has collected $80,000 of what it earned. If the company reports

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Revenue earned = $100,000

Cash received for revenue earned = $80,000

Revenue reported by company = $100,000

Under the accrual basis of accounting, actual revenue earned by the company is recorded. It does not matter how much revenue is recovered in cash. Hence, company must have used accrual basis of accounting.

If the company had been using cash basis of accounting, it would have reported revenue of $80,000 only.

Second option is correct.

Kindly comment if you need further assistance.

Thanks‼!

Add a comment

Answer 2

Similar Homework Help Questions

Suppose a company earned $100,000 this accounting period and has collected $80,000 of what it earned....

Suppose a company earned $100,000 this accounting period and has collected $80,000 of what it earned. If the company reports revenue of $100,000, this company is reporting under which basis of accounting? There is not enough information to know Accrual Basis Deferred Basis Cash Basis
When the amount of revenue collected in advance decreases during an accounting period: Multiple Choice Accrual-basis...

When the amount of revenue collected in advance decreases during an accounting period: Multiple Choice Accrual-basis revenues exceed cash collections from customers. Accrual-basis net income exceeds cash-basis net income. Accrual-basis revenues are less than cash collections from customers. May exceed, equal or be less than cash payments to suppliers.
Slater Company uses the cash basis of accounting. Slater Company collected $950,000 from its customers during...

Slater Company uses the cash basis of accounting. Slater Company collected $950,000 from its customers during 2015. Customers owed Slater $150,000 of accounts receivable at the beginning of 2015, and $190,000 of accounts receivable at the end of 2015. What is Slater's sales revenue for 2015 under the accrual basis of accounting? $940,000 $810,000 $990,000 $950,000

Revenue is reported on the income statement in the period earned. The accounting concept supporting this...

Revenue is reported on the income statement in the period earned. The accounting concept supporting this reporting is the a. Income statement concept. O b. revenue recognition concept. O c. cash basis concept. O d. adjusting concept.
Which accounting principle supports reporting revenues in the priod they are earned? Select one: a. accounting...

Which accounting principle supports reporting revenues in the priod they are earned? Select one: a. accounting period b. revenue recognition c. matching d. cash basis
GAAP refers to: a. General Association of Accounting Professionals &

GAAP refers to: a. General Association of Accounting Professionals b. Generally Accepted Accounting Profession c. Rules that assure consistency in reporting financial history d. Rules that are set up to make sure each company reports their own financial history. Accounting is a process that: a. Reports the profit and loss a firm makes b. Reports the financial history of the firm c. Reports information to external users of the financial statements. d. Reports to the S.E.C. There are four basic financial statements required by GAAP. They are: a. Balance Sheet,...

27) In its first year of operations, Bulldog Corporation reports the following: Earned revenues of $100,000...

27) In its first year of operations, Bulldog Corporation reports the following: Earned revenues of $100,000 ($42,000 cash received from customers); incurred expenses of $65,000 ($31,000 cash paid toward them); prepaid $50,000 cash for costs that will not be expensed until next year. Net income under the accrual basis of accounting is: A) $17,000. B) $35,000. C) $13,000. D) $25,000 E) None of these choices are correct.
Explain the difference between accrual basis accounting and cash basis accounting. Accrual basis accounting reports revenues...

Explain the difference between accrual basis accounting and cash basis accounting. Accrual basis accounting reports revenues and expenses when cash is received or paid Cash basis accounting reports revenues and expenses in the period in which a service has been performed when cash is received or paid in the period in which a service has been performed
Delta Company experienced an accounting event that affected its financial statements as indicated below: Asset Liab....

Delta Company experienced an accounting event that affected its financial statements as indicated below: Asset Liab. 1. Equity Rev. 1- Exp |- Net Inc. Stmt of Cash Flow NA NA OA Which of the following accounting events could have caused these effects on the elements of Delta's statements? A) Paid a cash dividend B) Incurred a cash expense C) Borrowed money from a bank D) Earned cash revenue 7)_ _What is the purpose of the accrual basis of accounting? A)...

What is the purpose of the accrual basis of accounting? Multiple Choice Recognize revenue when it...

What is the purpose of the accrual basis of accounting? Multiple Choice Recognize revenue when it is collected from customers. Match assets with liabilities during the proper accounting period. Recognize expenses when cash disbursements are made. Recognizing revenue when it is earned and expenses when they are incurred, regardless of when cash changes hands.

Suppose a company earned $100,000 this accounting period and has collected $80,000 of what it earned....

Homework Answers

Add Answer to:
Suppose a company earned $100,000 this accounting period and has collected $80,000 of what it earned....

Post as a guest

Earn Coins