company has repair work done in December and pays the service provider in January. How would this be recorded under the cash and accrual methods? Group of answer choices It’s an expense in December under the accrual method and an expense in January under the cash method

company has repair work done in December and pays the service provider in January. How would this be recorded under the cash and accrual methods? Group of answer choices It’s an expense in December under the accrual method and an expense in January under the cash method

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter22: Providing And Obtaining Credit

Section: Chapter Questions

Problem 7MC

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Question

A company has repair work done in December and pays the service provider in January. How would this be recorded under the cash and accrual methods?

Group of answer choices

It’s an expense in December under the accrual method and an expense in January under the cash method

It’s an expense in December under both the accrual and cash methods

It’s an expense in January under both the accrual and cash methods

Expert Solution

Step 1

Solution:

This will be recorded as under:

"It’s an expense in December under the accrual method and an expense in January under the cash method".

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