Raymundos Catering completed the following selected transactions during May: Requirements 1. Show whether each transaction would be

Question:

Raymundo’s Catering completed the following selected transactions during May: 


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Requirements 


1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the following table. (Expenses should be shown in parentheses.) Also, indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example.


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2. After completing the table, calculate the amount of net income or net loss for Raymundo’s Catering under the accrual basis and cash basis accounting systems for May. 


3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Raymundo’s Catering? Why?  

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