1. The accrual concept:

Select one:

a. Explains when revenues and expenses should be recognized

b. Explains how to calculate accruals

c. Is part of the IASB conceptual framework

d. Is different under IAS accounting than from US GAAP accounting

2. At the end of 2019, company ASD Ltd. had total receivables for 25,000. Of those receivables, one for 1,500 and another for 2,000 were considered doubtful at the end of the year. During 2020, the customer owing 1,500 paid its debt if full while the one owing 2,000 has gone bankrupt and ASD Ltd. has written off its debt completely. There are no doubtful debts at the end of 2020. What are the effects of bad and doubtful debts on profits and cash in 2020?

Select one:

a. Profits increase by 1,500, cash increase by 1,500

b. Profits decrease by 2,000, cash decreases by 2,000

c. Profits decrease by 3,500, no cash movement

d. Profits decrease by 500, cash decreases by 500