A company sells products on credit, with amounts due in 30 days. How would products sold in December but paid for by the customers in January be recorded under the cash and accrual methods? Group of answer choices It’s income in January under both the accrual and cash methods It’s income in December under the accrual method and income in January under the cash method It’s income in December under both the accrual and cash methods
A company sells products on credit, with amounts due in 30 days. How would products sold in December but paid for by the customers in January be recorded under the cash and accrual methods? Group of answer choices It’s income in January under both the accrual and cash methods It’s income in December under the accrual method and income in January under the cash method It’s income in December under both the accrual and cash methods
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
A company sells products on credit, with amounts due in 30 days. How would products sold in December but paid for by the customers in January be recorded under the cash and accrual methods?
Group of answer choices
It’s income in January under both the accrual and cash methods
It’s income in December under the accrual method and income in January under the cash method
It’s income in December under both the accrual and cash methods
Expert Solution
Explanation:
Under the accrual method of accounting, sales are recognized when made whether the cash received or not.
Under the cash method of accounting, sales are recognized when the cash is received.
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