1. Under cash-basis accounting, when is revenue recorded? When is it recorded under accrual-basis accounting?

2. Under accrual accounting, when is revenue considered earned?

3. If a membership represents an advance payment for services provided, when is it recognized as revenue under the accrual basis, and what is it called?

4. Why is insurance expense spread over multiple periods even though the policy coverage is paid in advance?

5. At the end of the month for Silvers Gym, what entries need to be made under the cash basis of accounting for wages that have not yet been paid? What entries need to be made under the accrual method?

6. Why is it important to match expenses and revenues to reflect the performance of a business over a particular time period?

7. When might the use of cash basis accounting overstate the actual profits earned by Silvers gym? When might it understate the actual profits earned?

8. Which basis of accounting is in accordance with GAAP for large companies?