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Delicious Catering completed the following selected transactions during May 2018: Click the icon to view the transactions) Read the requirements Requirement 1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the table provided. (Expenses should be shown in parentheses) Also indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example. (Enter "0" for any transactions that do not affect revenues or expenses.) Date May 1 May 5 May 9 May 14 May 23 May 31 May 31 May 31 Amount of Revenue (Expense) for May Cash Basis Amount of Revenue (Expense) S (3,600) rent The salary depr Accrual Basis Amount of Revenue (Expense) $ 0 Requirement 2. After completing the table, calculate the amount of net income or net loss for Delicious Catering under the accrual basis and cash basis accounting systems for May. (Use parentheses or a minus sign to indicate a loss.) Accrual Basis Amount Cash Basis Amount Net income (loss) Requirement 3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Delicious Catering? Why? gives the best picture of the true earnings of Delicious Catering because revenues are recorded when and expenses are recorded when as dictated by the revenue recognition principle and the matching principle

Delicious Catering completed the following selected transactions during May 2018: Click the icon to view the transactions) Read the requirements Requirement 1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the table provided. (Expenses should be shown in parentheses) Also indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example. (Enter "0" for any transactions that do not affect revenues or expenses.) Date May 1 May 5 May 9 May 14 May 23 May 31 May 31 May 31 Amount of Revenue (Expense) for May Cash Basis Amount of Revenue (Expense) S (3,600) rent The salary depr Accrual Basis Amount of Revenue (Expense) $ 0 Requirement 2. After completing the table, calculate the amount of net income or net loss for Delicious Catering under the accrual basis and cash basis accounting systems for May. (Use parentheses or a minus sign to indicate a loss.) Accrual Basis Amount Cash Basis Amount Net income (loss) Requirement 3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Delicious Catering? Why? gives the best picture of the true earnings of Delicious Catering because revenues are recorded when and expenses are recorded when as dictated by the revenue recognition principle and the matching principle

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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May Accrual Bacio Amount of Re amou ccrua ent 2 hings More info May 1 May 5 May 9 May 14 May 23 May 31 May 31 May 31 Prepaid rent for three months, $3,600. Received and paid electricity bill, $500. Received cash for meals served to customers, $2,400. Paid cash for kitchen equipment, $2,100. Served a banquet on account, $3,200. Made the adjusting entry for rent (from May 1). Accrued salary expense, $1,000. Recorded depreciation for May on kitchen equipment, $35. Print Done - X
Transcribed Image Text:May Accrual Bacio Amount of Re amou ccrua ent 2 hings More info May 1 May 5 May 9 May 14 May 23 May 31 May 31 May 31 Prepaid rent for three months, $3,600. Received and paid electricity bill, $500. Received cash for meals served to customers, $2,400. Paid cash for kitchen equipment, $2,100. Served a banquet on account, $3,200. Made the adjusting entry for rent (from May 1). Accrued salary expense, $1,000. Recorded depreciation for May on kitchen equipment, $35. Print Done - X
Delicious Catering completed the following selected transactions during May 2018: (Click the icon to view the transactions.) Read the requirements Requirement 1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the table provided. (Expenses should be shown in parentheses.) Also indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example. (Enter "0" for any transactions that do not affect revenues or expenses.) Date May May 5 May 9 May 14 May 23 May 31 May 31 May 31 Amount of Revenue (Expense) for May Cash Basis Amount of Revenue (Expense) $ (3,600) rent salary depr The Accrual Basis Amount of Revenue (Expense) $ 0 Requirement 2. After completing the table, calculate the amount of net income or net loss for Delicious Catering under the accrual basis and cash basis accounting systems for May. (Use parentheses or a minus sign to indicate a loss.) Cash Basis Amount Accrual Basis Amount Net income (loss) Requirement 3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Delicious Catering? Why? gives the best picture of the true earnings of Delicious Catering because revenues are recorded when and expenses are recorded when as dictated by the revenue recognition principle and the matching principle Next
Transcribed Image Text:Delicious Catering completed the following selected transactions during May 2018: (Click the icon to view the transactions.) Read the requirements Requirement 1. Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the table provided. (Expenses should be shown in parentheses.) Also indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example. (Enter "0" for any transactions that do not affect revenues or expenses.) Date May May 5 May 9 May 14 May 23 May 31 May 31 May 31 Amount of Revenue (Expense) for May Cash Basis Amount of Revenue (Expense) $ (3,600) rent salary depr The Accrual Basis Amount of Revenue (Expense) $ 0 Requirement 2. After completing the table, calculate the amount of net income or net loss for Delicious Catering under the accrual basis and cash basis accounting systems for May. (Use parentheses or a minus sign to indicate a loss.) Cash Basis Amount Accrual Basis Amount Net income (loss) Requirement 3. Considering your results from Requirement 2, which method gives the best picture of the true earnings of Delicious Catering? Why? gives the best picture of the true earnings of Delicious Catering because revenues are recorded when and expenses are recorded when as dictated by the revenue recognition principle and the matching principle Next
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