Question

Show the amount of revenue and expense recognised for each of the following transactions for the month of June 2016 under the cash basis and the accrual basis of accounting by completing the following table.

June 18 Invoiced $600 for a job completed for a customer.

June 23 Paid a $500 account for professional services from May 2018.

June 30 Accrued wages of $650.

Enter amounts without punctuation and symbols. If there is no impact enter 0.

Cash Basis

Date	Revenue	Expense
18/06/18	Answer	Answer
23/06/18	Answer	Answer
30/06/18	Answer	Answer

Accrual Basis

Date	Revenue	Expense
18/06/18	Answer	Answer
23/06/18	Answer	Answer
30/06/18	Answer	Answer

Answer 1

Answer :

Cash basis:

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. Thus, you record revenue only when a customer pays for a billed product or service, and you record a payable only when it is paid by the company

Accrual basis:

Under the accrual basis of accounting, expenses are matched with the related revenues and/or are reported when the expense occurs, not when the cash is paid. The result of accrual accounting is an income statement that better measures the profitability of a company during a specific time period.

Solution:

Cash basis

Date.	revenue	expnses
18/06/18	0	0
23/06/18	0	$500
30/06/18	0	0

Accrual basis:

Date .	revenue .	expenses
18/06/18	$600	0
23/06/18	0	0
30/06/18	0	$650