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
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Accrual-basis revenues exceed cash collections from customers.
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Accrual-basis net income exceeds cash-basis net income.
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Accrual-basis revenues are less than cash collections from customers.
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May exceed, equal or be less than cash payments to suppliers.
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When the amount of revenue collected in advance decreases during
an accounting period:
Multiple Choice
Accrual-basis...
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.
What is the correct answer? When converting an income statement from a cash basis to an...
What is the correct answer?
When converting an income statement from a cash basis to an accrual basis, expenses: Multiple Choice Exceed cash payments to suppliers. Equal cash payments to suppliers. Are less than cash payments to suppliers. May exceed, equal or be less than cash payments to suppliers.
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...
Which of the following statements about cash basis accounting and accrual basis accounting is correct? Multiple...
Which of the following statements about cash basis accounting and accrual basis accounting is correct? Multiple Choice 1 O If payment is received at the same time a service is provided, it does not matter whether cash basis accounting or accrual basis accounting is used; both would record the transaction with the same journal entry The cash basis of accounting works best when a lengthy delay exists between the timing of cash flows and the underlying business activities to which...
Multiple Choice Question 28 Most of the capital budgeting methods use accrual accounting revenues. accrual accounting...
Multiple Choice Question 28 Most of the capital budgeting methods use accrual accounting revenues. accrual accounting numbers. cash flow numbers. net income.
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...
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...
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).
CASH BASIS VERSUS ACCRUAL BASIS ACCOUNTING (11 Marks) The following transactions for January 2020 are as...
CASH BASIS VERSUS ACCRUAL BASIS ACCOUNTING (11 Marks) The following transactions for January 2020 are as follows: 1 Purchased a two-year insurance policy for cash, $1,800 9 Performed a service on account, $800 16 Paid wages to employees, $950 18 Completed a job for a customer and collected $600 cash 23 Collected $500 of the amount owed from May 9 30 Accrued wages of $650 Using the Cash basis of accounting, calculate the Net Income (Loss) for January 2020. (5...
Cash-Basis and Accrual-Basis Accounting The records of Summers Building Company reveal the following information for 2018....
Cash-Basis and Accrual-Basis Accounting The records of Summers Building Company reveal the following information for 2018. a. Cash receipts during 2018 (including $50,000 paid by shareholders in exchange for common shares) were $246,410. b. Cash payments during 2018 (including $14,800 of dividends paid to shareholders) were $164,850. C. Total selling price of services billed to customers during 2018 was $222,300. d. Salaries earned by employees during 2018 were $93,000. e. Cost of supplies used during 2018 in operation of the...
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.
What is the correct answer?
When converting an income statement from a cash basis to an accrual basis, expenses: Multiple Choice Exceed cash payments to suppliers. Equal cash payments to suppliers. Are less than cash payments to suppliers. May exceed, equal or be less than cash payments to suppliers.
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...
Which of the following statements about cash basis accounting and accrual basis accounting is correct? Multiple Choice 1 O If payment is received at the same time a service is provided, it does not matter whether cash basis accounting or accrual basis accounting is used; both would record the transaction with the same journal entry The cash basis of accounting works best when a lengthy delay exists between the timing of cash flows and the underlying business activities to which...
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...
CASH BASIS VERSUS ACCRUAL BASIS ACCOUNTING (11 Marks) The following transactions for January 2020 are as follows: 1 Purchased a two-year insurance policy for cash, $1,800 9 Performed a service on account, $800 16 Paid wages to employees, $950 18 Completed a job for a customer and collected $600 cash 23 Collected $500 of the amount owed from May 9 30 Accrued wages of $650 Using the Cash basis of accounting, calculate the Net Income (Loss) for January 2020. (5...
Cash-Basis and Accrual-Basis Accounting The records of Summers Building Company reveal the following information for 2018. a. Cash receipts during 2018 (including $50,000 paid by shareholders in exchange for common shares) were $246,410. b. Cash payments during 2018 (including $14,800 of dividends paid to shareholders) were $164,850. C. Total selling price of services billed to customers during 2018 was $222,300. d. Salaries earned by employees during 2018 were $93,000. e. Cost of supplies used during 2018 in operation of the...
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