Accrual basis accounting: According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not. Cash basis accounting: According to this basis of accounting, revenue should be recognized at the time of receiving in the form of cash and expense should be recognized at the time of payment. To identify : The correct answer by finding the account that produces lower amount of net income under cash basis of accounting as compare to accrual basis of accounting when it is net decreased.

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Answer 1

Question

Chapter 2, Problem 3CPA

To determine

Accrual basis accounting:

According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not.

Cash basis accounting:

According to this basis of accounting, revenue should be recognized at the time of receiving in the form of cash and expense should be recognized at the time of payment.

To identify: The correct answer by finding the account that produces lower amount of net income under cash basis of accounting as compare to accrual basis of accounting when it is net decreased.

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Answer 2

Question

Chapter 2, Problem 3CPA

To determine

Accrual basis accounting:

According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not.

Cash basis accounting:

According to this basis of accounting, revenue should be recognized at the time of receiving in the form of cash and expense should be recognized at the time of payment.

To identify: The correct answer by finding the account that produces lower amount of net income under cash basis of accounting as compare to accrual basis of accounting when it is net decreased.

Expert Solution & Answer

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Answer 3

Question

Chapter 2, Problem 3CPA

To determine

Accrual basis accounting:

According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not.

Cash basis accounting:

According to this basis of accounting, revenue should be recognized at the time of receiving in the form of cash and expense should be recognized at the time of payment.

To identify: The correct answer by finding the account that produces lower amount of net income under cash basis of accounting as compare to accrual basis of accounting when it is net decreased.

Expert Solution & Answer

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Answer 4

Question

Chapter 2, Problem 3CPA

To determine

Accrual basis accounting:

According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not.

Cash basis accounting:

According to this basis of accounting, revenue should be recognized at the time of receiving in the form of cash and expense should be recognized at the time of payment.

To identify: The correct answer by finding the account that produces lower amount of net income under cash basis of accounting as compare to accrual basis of accounting when it is net decreased.

Expert Solution & Answer

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Answer 5

Chapter 2, Problem 3CPA

To determine

Accrual basis accounting:

According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not.

Cash basis accounting:

According to this basis of accounting, revenue should be recognized at the time of receiving in the form of cash and expense should be recognized at the time of payment.

To identify: The correct answer by finding the account that produces lower amount of net income under cash basis of accounting as compare to accrual basis of accounting when it is net decreased.

Answer 6

Chapter 2, Problem 3CPA

To determine

Accrual basis accounting:

According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not.

Cash basis accounting:

According to this basis of accounting, revenue should be recognized at the time of receiving in the form of cash and expense should be recognized at the time of payment.

To identify: The correct answer by finding the account that produces lower amount of net income under cash basis of accounting as compare to accrual basis of accounting when it is net decreased.

Answer 7

Chapter 2, Problem 3CPA

To determine

Accrual basis accounting:

According to this basis of accounting, revenue should be recognized at the time when it is earned, irrespective of whether the cash received or not, and expense should be recognized at the time when it is incurred, irrespective of whether it is paid or not.

Cash basis accounting:

According to this basis of accounting, revenue should be recognized at the time of receiving in the form of cash and expense should be recognized at the time of payment.

To identify: The correct answer by finding the account that produces lower amount of net income under cash basis of accounting as compare to accrual basis of accounting when it is net decreased.

Answer 8

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Answer 9

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Answer 10

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Answer 11

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