1. Match each term associated with accrual-basis and cash-basis accounting with its most appropriate description.

1. Accrual-basis expense
2. Accrual-basis revenue
3. Revenue recognition principle
4. Cause-and-effect
5. Cash basis revenue
6. 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 pays cash for supplies in May and uses those supplies in June. The expense is recorded in June.

• Informal concept in accounting which states that expenses are recorded in the same period as the revenues they help to generate.

• A company receives cash from customers in May and performs services in June. The revenue is recorded in June.

• Formal concept which states that sales of products or services are recorded in the period they are provided to customers.

• A company receives cash from customers in May and performs services in June. The revenue is recorded in May.