Ask Question
30 August, 04:54

A company provided $1,500 of services to customers during the month of May. The customers paid in June. What would the impact of these transactions be during May on each of the following three items?

Cash balance - no effect

cash basis net income - no effect

accrual-basis net income - increase T/F

+1
Answers (1)
  1. 30 August, 07:13
    0
    The answer is true

    Explanation:

    The cash basis is a method of recording accounting transactions for revenue and expenses only when the corresponding cash is received or payments are made. In the above transaction there was no cash received therefore there was no effect.

    Accrual basis is a method of recording accounting transactions for revenue when earned and expenses when incurred. In the above transaction, a service was rendered which increases revenue despite the fact that nocash was received for the service.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A company provided $1,500 of services to customers during the month of May. The customers paid in June. What would the impact of these ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers