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Required: For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under cash-basis accounting. Accrual-Basis Cash-Basis Transaction Revenue Expense Revenue Expense 1. Receive cash from customers at the time of service, $3,000. $ 3,000 $ 3,000 2. Issue common stock for cash, $5,300. 3. Receive cash from customers who were previously billed, $1,350. $ 1,350 4. Incur utilities cost in the current month but do not pay, $530. $ 530 5. Pay workers' salaries for the current month, $630. 6. Pay for rent one year in advance, $2,760. $ 630 630 $ 2,760 7. Repay a long-term note to the bank, $2,300. 8. Pay workers' salaries for the previous month, $780. 9. Pay dividends to stockholders, $430. $ 780 10. Purchase office supplies for cash, $470. 2$ 470

Required: For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under cash-basis accounting. Accrual-Basis Cash-Basis Transaction Revenue Expense Revenue Expense 1. Receive cash from customers at the time of service, $3,000. $ 3,000 $ 3,000 2. Issue common stock for cash, $5,300. 3. Receive cash from customers who were previously billed, $1,350. $ 1,350 4. Incur utilities cost in the current month but do not pay, $530. $ 530 5. Pay workers' salaries for the current month, $630. 6. Pay for rent one year in advance, $2,760. $ 630 630 $ 2,760 7. Repay a long-term note to the bank, $2,300. 8. Pay workers' salaries for the previous month, $780. 9. Pay dividends to stockholders, $430. $ 780 10. Purchase office supplies for cash, $470. 2$ 470

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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Required: For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under cash-basis accounting. Accrual-Basis Cash-Basis Transaction Revenue Expense Revenue Expense 1. Receive cash from customers at the time of service, $3,000. $ 3,000 $ 3,000 2. Issue common stock for cash, $5,300. 3. Receive cash from customers who were previously billed, $1,350. $ 1,350 4. Incur utilities cost in the current month but do not pay, $530. 530 5. Pay workers' salaries for the current month, $630. $ 630 $ 630 6. Pay for rent one year in advance, $2,760. 7. Repay a long-term note to the bank, $2,300. $ 2,760 8. Pay workers' salaries for the previous month, $780. 9. Pay dividends to stockholders, $430. 780 10. Purchase office supplies for cash, $470. $ 470 %24
Transcribed Image Text:Required: For each transaction, determine the amount of revenue or expense, if any, that is recorded under accrual-basis accounting and under cash-basis accounting. Accrual-Basis Cash-Basis Transaction Revenue Expense Revenue Expense 1. Receive cash from customers at the time of service, $3,000. $ 3,000 $ 3,000 2. Issue common stock for cash, $5,300. 3. Receive cash from customers who were previously billed, $1,350. $ 1,350 4. Incur utilities cost in the current month but do not pay, $530. 530 5. Pay workers' salaries for the current month, $630. $ 630 $ 630 6. Pay for rent one year in advance, $2,760. 7. Repay a long-term note to the bank, $2,300. $ 2,760 8. Pay workers' salaries for the previous month, $780. 9. Pay dividends to stockholders, $430. 780 10. Purchase office supplies for cash, $470. $ 470 %24
Expert Solution
Step 1 Introduction:

Expense refers to the amount or cost which is incurred by the business to generate income or revenues. Expenses can be operating or non-operating in nature. Expenses include cost of direct materials, depreciation, utilities, rent, direct labor, selling and distribution and office and administrative expenses.

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