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accrual accounting

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Can you help me with the two following accounting questions and spreadsheet? Having a hard time with examples.

Questions:
*How to define accrual accounting & how to contrast it with cash basis accounting?

*What 4 conditions must normally met for revenue to be recognized under accual basis accounting?

Spreadsheet:

Company had the following transactions in March:

A) sold merchandise to clients for $10,000. Received $6,000 in cash & rest on account. The cost of the merchandise was $7,000.

B)purchased $4,000 of new merchandise for inventory. paid $1,000 in cash and owed the rest on account.

C).Paid $600 for the month in payroll

D). Received a bill for $200 for power bill that will be paid in April

E) Recieved $1,000 from client as deposits on new orders of merchandise to be sold to the customers in April

Need help with the following statement with above info

*Cash Basis Income statement:

Revenues
Cash sales $
Client deposits $

Expenses
Merchandise purchases $
Payroll paid $

Cash Income $

Accural Basis Income Statement:

Revenues
Sales to clients $

Expenses
Cost of sales $
Payroll expense $
Power bill expense $

Net Income $

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https://brainmass.com/business/cash-vs-accrual-accounting/accrual-accounting-180269

Solution Preview

1.
Accrual accounting records financial events based on economic activity rather than financial activity. Under accrual accounting, revenue is recorded when it is earned and realized, regardless of when actual payment is received.
Using ...

Solution Summary

*How to define accrual accounting & how to contrast it with cash basis accounting?

*What 4 conditions must normally met for revenue to be recognized under accual basis accounting?

$2.19
See Also This Related BrainMass Solution

Define accrual accounting and contrast it with cash basis accounting.

Define accrual accounting and contrast it with cash basis accounting.
What four conditions must normally be met for revenue to be recognized under accrual basis
accounting?

Reporting Cash Basis versus Accrual Basis Income
Mostert Music Company had the following transactions in March:

a. Sold instruments to customers for $10,000; received $6,000 in cash and the rest on account.
The cost of the instruments was $7,000.

b. Purchased $4,000 of new instruments inventory; paid $1,000 in cash and owed the rest on
account.

c. Paid $600 in wages for the month.
d. Received a $200 bill for utilities that will be paid in April.
e. Received $1,000 from customers as deposits on orders of new instruments to be sold to the
customers in April.

Cash Basis Income Statement Accrual Basis Income Statement
Revenues: Revenues:
Cash sales $ Sales to customers $
Customer deposits
Expenses: Expenses:
Inventory purchases Cost of sales
Wages paid Wages expense
Utilities expense
Cash income $ Net income $

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