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Cash to accrual basis

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1) when converting an income statement from cash to accrual basis, cash received for services:

A. Exceed service revenue
B. May exceed or be less than service revenue
C. Is less than service rev
D. Equals service revenue.

2) when converting an income statement from cash to accrual basis, expenses:

A. Exceed cash payments to suppliers
B. Equals cash payments to suppliers
C. Are less than cash payments to suppliers
D. May exceed or be less than cash payments to suppliers.

3) when the amount of interest receivable decreases during an accounting period:

A. Accrual basis interest revenues exceed cash collection from borrowers.
B. Accrual basis net income exceeds cash basis net income.
C. Accrual basis interest revenues are less than cash collections from borrowers.
D. Accrual basis net income is less than cash basis net income.

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The solution explains some questions relating to cash to accrual basis conversion

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1. B. May exceed or be less than service revenue
We may have received cash in advance or we may have provided services on credit and so cash received may be higher or lower

2. D. May exceed or be less ...

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