Question : 74. When the amount of interest receivable decreases during an : 1255857

 

 

74. When the amount of interest receivable decreases during an accounting period:

a. Accrual-basis revenues exceed cash collections from borrowers.

b. Accrual-basis net income exceeds cash-basis net income.

c. Accrual-basis revenues are less than cash collections from borrowers.

d. Accrual-basis expenses are less than cash payments to borrowers.

 

 

75. When the balance of the Unearned Revenue account decreases during an accounting period:

a. Accrual-basis revenues exceed cash collections from customers.

b. Accrual-basis expenses exceed cash collections from customers.

c. Accrual-basis revenues are less than cash collections from customers.

d. Accrual-basis net income is less than cash-basis net income.

 

 

 

76. Which transaction would not be recorded under cash-basis accounting?

a. Providing services to customers for cash.

b. Paying one year of rent in advance.

c. Paying salaries to employees.

d. Purchasing supplies on account.

 

 

77. Which of the following statements are correct?

For accrual-basis accounting:

(1) record revenues when earned.

(2) record expenses when cash is paid.

For cash-basis accounting:

(3) record revenue when cash is received.

(4) record expenses when benefit is received.

a. (1) and (4).

b. (2) and (3).

c. (1) and (3).

d. (2) and (4).

 

 

78. On July 1, 2015, Rents-A-Lot Inc. paid $72,000 for 36 months of advance rent on its warehouse. What would be the amount of rent expense in the 2016 financial statements for Rents-A-Lot under both cash-basis and accrual-basis accounting?

a. Cash-basis = $24,000; Accrual-basis = $24,000.

b. Cash-basis = $72,000; Accrual-basis = $12,000.

c. Cash-basis = $0; Accrual-basis = $24,000.

d. Cash-basis = $0; Accrual-basis = $12,000.

 

 

79. The following information pertains to Sooner Company:

 

Assuming that Sooner Company uses cash-basis accounting, when would the company record the expense related to the supplies?

a. May 2.

b. May 8.

c. May 15.

d. May 20.

 

 

80. The following information pertains to Sooner Company:

 

Assuming that Sooner Company uses accrual-basis accounting, when would the company record the expense related to the supplies?

a. May 2.

b. May 8.

c. May 15.

d. May 20.

 

 

81. Consider the following events for Betterment Incorporated:

 

Under accrual-basis accounting, what is the appropriate day to record the revenues related to lawn services?

a. January 1.

b. January 7.

c. January 9.

d. January 12.

 

 

82. Consider the following events for Betterment Incorporated:

 

Under accrual-basis accounting, what is the appropriate day to record the expenses related to the gasoline?

a. January 1.

b. January 7.

c. January 12.

d. January 13.

 

 

83. Consider the following events for Betterment Incorporated:

 

Under cash-basis accounting, what is the appropriate day to record the expenses related to the gasoline?

a. January 1.

b. January 9.

c. January 12.

d. January 13.