Requirement 3.

The (accural-basis / cash-basis) measure of net income is preferable because it accounts for revenues and expenses when they (are recieved or paid in cash / occur), not when they (are recieved or paid in cash / occur) . For example, on May 11, the company (collected / earned) $3,000 of revenue and increased its wealth as a result. The (accural-basis / cash-basis) basis records this revenue, but the (accural-basis / cash-basis) ignores it.

On May 24, the business collected the receivable that was created by the revenue earned on account at May 11. The (accural-basis / cash-basis) records no revenue on May 24, because the company's increase in wealth occurred back on May 11, The (accural-basis / cash-basis) waits until cash is received on May 24, to record the revenue. This is (too early / too late).

Select the options in brackets

* More Info - X May 1 Prepaid insurance for May through July, $3,900. 4 Purchased office furniture for cash, $3,500. 5 Performed services and received cash, $1,800. 8 Paid advertising expense, $200. 11 Performed service on account, $3,300. 19 Purchased computer on account, $2,200. 24 Collected for May 11 service. 26 Paid account payable from May 19. 29 Paid salary expense, $1,100. 31 Adjusted for May insurance expense (see May 1). 31 Earned revenue of $800 that was collected in advance back in April. 31 Recorded May depreciation expense on all fixed assets, $160. Print Done Amount of Revenue (Expense) for May Cash Basis Accrual Basis Revenue or (Expense) Revenue or (Expense) Date May Requirement 2. Compute May income (loss) before tax under each accounting method. Income (loss) before tax