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provide the following answer. thank you Financial Accounting III Activity 3 TRUE OR FALSE 1. Accrual basis accounting involves recording revenues when earned and recording

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Financial Accounting III Activity 3 TRUE OR FALSE 1. Accrual basis accounting involves recording revenues when earned and recording expenses with their related revenues. 2. The revenue recognition principle states that we record revenue in the period in which we collect cash. 3. According to the revenue recognition principle, if a company provides services to a customer in the current year but does not collect cash until the following year, the company should report the revenue in the current year. 4. The matching principle states that we recognize expenses in the same period as the revenues they help to generate 5. According to the matching principle, if costs associated with producing revenue in the current year are not paid in cash until the following year, the costs should be expensed in the current year 6. Under cash-basis accounting, we record revenues at the time we receive cash and expenses at the time we pay cash 7. Under cash-basis accounting, the timing of cash inflows and outflows exactly matches the reporting of revenues and expenses in the income statement. 8. Under cash-basis accounting, if a company provides services to a customer in the current year but does not collect cash until the following year, the company should report the revenue in the current year. 9. Under cash-basis accounting, if costs associated with producing revenue in the current year are not paid in cash until the following year, the costs should be expensed in the following year. 10. Because cash-basis accounting violates both the revenue recognition principle and the matching principle, it is generally not accepted in preparing financial statements, 11. On July 1, 2012, Rents-A-Lot Inc. paid $72,000 for 36 months of advance rent on its Warehouse. What would be the amount of rent expense in the 2013 financial statements for Rents-A-Lot under both cash basis and accrual-basis accounting? A Cash-basis - $24,000; Accrual-basis - $24,000. B. Cash-basis - $72,000; Accrual-basis - S12,000. C. Cash-basis - $0; Accrual-basis - $24,000. D. Cash-basis - $0; Accrual-basis = $12,000. 12. The following information pertains to Sooner Company: Assuming that Sooner Company uses cash-basis accounting, when would the company record the expense related to the supplies? A. May 2 B. May 8. C. May 15, D. May 20 13. David, a lawyer, maintains his accounting records under the cash basis of accounting. During 2019, David collected P200,000 in fees from clients. At December 31, 2018, David has accounts receivable of P40,000. At December 31, 2019, David had accounts receivable of P60,000 and unearned fees of P5,000. On accrual basis, what was David's service revenue for 2019? 14. Ten started operating a service proprietorship on April 1, 2019 with an initial cash investment of P120,000. The business provided P38,400 of services in April and received full payment in May. The business incurred expenses of P18,000 in April which were paid in June. During May, Ten drew P6,000 against his capital account, What was the income for the two months ended May 31,2019 under the accrual and cash basis of accounting? 15. TEN Co. does not keep a full set of business records, but the following information is available for the month of June 2019: Trade receivables, June 1, 2019 P80,000 Trade receivables, June 30, 2019 55,000 Credit Sales 680,000 Cash received from customers 673,000 Bad debts written off 4,000 General provision for doubtful debts set up in June 10,000 Assuming no other transactions, how much discount was allowed to the customers during the month of June? 16. TEN Co. is engaged in a small export business, hence, the company maintains limited records, Most of the company's transactions are summarized in a cash journal; non-cash transactions are recorded by making memo entries. The following balances are taken from the company's records: January 1,2019 December 31,2019 Accounts Receivable 150,000 100,000 Accounts Payable 200.000 100,000 Accounts Written-om 5.000 Cash Received from 2,100,000 customers Cash Paid to Creditors 1,400,000 Sales Discounts 4,000 Sales returns and allowances 10,000 Notes receivable-trade 50,000 100,000 Purchase Discounts 2,500 Purchase Returns 5,000 How much would be the gross sales for the year? How much would be the gross purchases for the year? 17. TL Co. is engaged in a small export business; hence, the company maintains limited records. Most of the company's transactions are summarized in a cash journal; non-cash transactions are recorded by making memo entries. The following balances are taken from the company's records: Accounts Receivable 370,000 increase Notes receivable 200.000 decrease Accounts Payable 150.000 decrease Notes Payable-trade 200,000 increase Notes Payable-bank 300,000 increase Sales returns (P50,000 was refunded) 80,000 Sales discounts 20,000 Purchase returns (P30,000 was refunded) 80,000 Purchase discounts 35.000 Accounts written-off 60.000 Recovery of accounts written off 18,000 Cash sales 300,000 Cash purchases 250,000 Cash received from account customers 1.500.000 Cash payment to trade creditors 1,200,000 What is the amount of gross sales? What is the amount of gross purchases

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