Assume that the accrual basis of accounting is used and that revenue is recognized at the time
Question:
Assume that the accrual basis of accounting is used and that revenue is recognized at the time goods are sold or services are rendered. Indicate the amount of expense recognized during March, if any, in each of the following situations:
a Rent is paid on March \(1, \$ 1,800\), for the 2 months starting at that time.
b An advance on the April salary is paid to an employee on March 28, \$100.
c Property taxes on a store building for the year of \(\$ 2,400\) were paid in January.
d An employee earned \(\$ 900\) of commissions during March, but has not yet been paid.
e The cost of equipment purchased on March 26, to be put into operation on April 1, is \(\$ 5,000\).
f \(\$ 800\) of supplies were purchased during March. On March 1, supplies were on hand that cost \(\$ 400\). At March 31, supplies that cost \(\$ 300\) were still on hand.
\(\mathrm{g}\) Data of part \(\mathrm{f}\), except that \(\$ 200\) of supplies were on hand at March 1.
h At March 1, the balance in the Prepaid Insurance account was \(\$ 4,800\). The insurance policy had 12 months to run at that time.
Step by Step Answer:
Financial Accounting An Introduction To Concepts Methods And Uses
ISBN: 9780030452963
2nd Edition
Authors: Sidney Davidson, Roman L. Weil, Clyde P. Stickney