(a)
Cash basis of accounting
Cash basis of accounting refers to the recognition of financial transactions only when the cash is received or paid.
Accrual basis of accounting:
Accrual basis of accounting refers to recognizing the financial transactions during the period in which the event occurs, even if the cash is not exchanged.
Income statement:
This is the financial statement of a company which shows all the revenues earned and expenses incurred by the company over a period of time.
To prepare: The accrual-basis income statement of Company F.
(b)
Classified
This is the financial statement of a company which shows the grouping of similar assets and liabilities under subheadings.
To prepare: The classified balance sheet statement of company F as at April 30, 2017
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Financial Accounting: Tools for Business Decision Making, 8th Edition
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- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College