An enterprise opened for business in December of the current year. During the month, it renders services of P80,000 for which customers are expected to pay in January next year; it also incurred and paid expenses amounting to P30,000.  I. How much profit or loss is to be reported for December of the current year if the enterprise uses the: A. CASH BASIS OF ACCOUNTING B. ACCRUAL BASIS OF ACCOUNTING II. Which method presents the true financial performance of the enterprise?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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An enterprise opened for business in December of the current year. During the month, it renders services of P80,000 for which customers are expected to pay in January next year; it also incurred and paid expenses amounting to P30,000. 

I. How much profit or loss is to be reported for December of the current year if the enterprise uses the:

A. CASH BASIS OF ACCOUNTING
B. ACCRUAL BASIS OF ACCOUNTING

II. Which method presents the true financial performance of the enterprise?

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