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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
9
![Required:
For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under
cash-basis accounting in the current period.
Transaction
1. Receive cash from customers in advance of services to be provided, $600.
2. Pay utilities bill for the previous period, $150.
3. Pay for insurance in advance of the period to be covered, $2,000.
4. Pay workers' salaries for the current period, $800.
5. Incur costs for employee salaries in the current period but do not pay, $1,000.
6. Receive cash from customers at the time of service, $1,700.
7. Purchase office supplies on account, $330.
8. Borrow cash from the bank, $4,000.
9. Receive cash from customers for services performed in the previous period, $750.
10. Pay for advertising to appear in the current period, $450.
Accrual-Basis
Cash-Basis
CHON
Revenue Expense Revenue Expense](https://content.bartleby.com/qna-images/question/807f184e-5fba-4868-ba94-035e841e828e/e542870a-6f34-401e-8ff3-bf945524015e/dhxeja_thumbnail.jpeg)
Transcribed Image Text:Required:
For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under
cash-basis accounting in the current period.
Transaction
1. Receive cash from customers in advance of services to be provided, $600.
2. Pay utilities bill for the previous period, $150.
3. Pay for insurance in advance of the period to be covered, $2,000.
4. Pay workers' salaries for the current period, $800.
5. Incur costs for employee salaries in the current period but do not pay, $1,000.
6. Receive cash from customers at the time of service, $1,700.
7. Purchase office supplies on account, $330.
8. Borrow cash from the bank, $4,000.
9. Receive cash from customers for services performed in the previous period, $750.
10. Pay for advertising to appear in the current period, $450.
Accrual-Basis
Cash-Basis
CHON
Revenue Expense Revenue Expense
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