Question

Which method(s) of accounting recognize revenue when payments are received from the owner, and expenses when bills are paid?

Select one or more:

a. Percentage of Completion

b. Completed Contract

c. Cash

d. Accrual

Which of the following are shown on the income statement?

Select one or more:

a. Liabilities

b. Owner's Equity

c. Equipment Costs

d. Profit

e. Overhead

Which of the following are shown on the balance sheet?

Select one or more:

a. Construction costs

b. Revenues

c. Assets

d. Notes Receivable

e. Accounts Payable

Answer 1

1) When revenue is recognized when cash received and expense is recognized when bill paid then it is cash basis of accounting

So answer is c) Cash

2) Liabilities, owner's equity, equipment all are recorded in balance sheet but overhead recorded in schedule of cost of goods manufactured but profit recorded in income statement

so answer is d) Profit

3) Assets, notes receivable and account payable all are shown in balance sheet

So answer is c) assets, d) Notes receivable, e) account payable

3)