ACCOUNTING PRINCIPLES V1 6/17 >C<
3rd Edition
ISBN: 9781323761434
Author: Horngren
Publisher: PEARSON C
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Textbook Question
Chapter 3, Problem E3.19E
Comparing cash and accrual basis accounting and applying the revenue recognition principle and the matching principle
| Learning Objectives 1,2 |
Chef’s Catering completed the following selected transactions during May 2018:
| May 1 | Prepaid rent for three months, $2,400. |
| 5 | Received and paid electricity bill, $700. |
| 9 | Received cash for meals served to customers, $2,600. |
| 14 | Paid cash for kitchen equipment, $3,000. |
| 23 | Served a banquet on account, $2,800. |
| 31 | Made the |
| 31 | Accrued salary expense, $1,600. |
| 31 | Recorded |
Requirements
- 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 following table. (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.
| Amount of Revenue (Expense) for May | ||
| Date | Cash Basis Amount of Revenue (Expense) |
Accrual Basis Amount of Revenue (Expense) |
| May 1 |
($2,400) |
$0 |
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Chapter 3 Solutions
ACCOUNTING PRINCIPLES V1 6/17 >C<
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