EBK HORNGREN'S ACCOUNTING
12th Edition
ISBN: 9780134487212
Author: MILLER-NOBLES
Publisher: PEARSON CO
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Textbook Question
Chapter 3, Problem E3.19E
Comparing cash and accrual basis accounting and applying the revenue recognition principle and the matching principle
Learning Objectives 1,2 |
Chef’s Catering completed the following selected transactions during May 2018:
May 1 | Prepaid rent for three months, $2,400. |
5 | Received and paid electricity bill, $700. |
9 | Received cash for meals served to customers, $2,600. |
14 | Paid cash for kitchen equipment, $3,000. |
23 | Served a banquet on account, $2,800. |
31 | Made the |
31 | Accrued salary expense, $1,600. |
31 | Recorded |
Requirements
- Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the following table. (Expenses should be shown in parentheses.) Also, indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example.
Amount of Revenue (Expense) for May | ||
Date | Cash Basis Amount of Revenue (Expense) |
Accrual Basis Amount of Revenue (Expense) |
May 1 |
($2,400) |
$0 |
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Chapter 3 Solutions
EBK HORNGREN'S ACCOUNTING
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