Instructions: Classify each transaction whether they are operating, financing or investing. After which, indicate the reason for classification. Finally indicate the effect of the transactions to cash flows. Transactions Activity Reason Effect Affects profit Payment to supplier of goods Operating Decrease Cash and loss Payment to supplier of services Receipt from goods sold Receipt from service rendered

Which one of the following statements about revenue is not correct?A. Revenue can result in increases in accounts receivableB. Revenue can result in increases in liabilitiesC. Revenue is earned whenever cash is received from a customerD. Revenue is earned when a service is provided to a customer

FASB suggest that revenues are considered to be earned: a. at the point of sale b. throughout the earnings process c. when the company is entitled to its benefits d. when cash is received

A business provider services to a customer on credit.Which of the following is correct: A.Assets increase and liabilities decrease at the time the cash is collected B.Assets increase and liabilities increase at the time of the sale C.Assets increase and the owner's equity increases at the time the cash is collected D.Assets increase and the owner's equity increases at the time of the sale

Which of the following statements is characteristic of accrual basis accounting? Expenses are recorded when payment is made. Revenue is recognized when payment is received. Transactions are recorded when they occur. The exchange of cash determines timing of revenue recognition.