Question:If accounts receivable have increased during the period, Show A) revenues on an accrual basis are less than revenues on a cash basis. B) revenues on an accrual basis are greater than revenues on a cash basis. C) revenues on an accrual basis are the same as revenues on an cash basis. D) expenses on an accrual basis are greater than expenses on a cash basis. Cash basis of accounting provides that all expense and revenues be recognized at the time thy're paid and collected, respectively, regardless of whether the expense have been incurred or the revenue have been earned already. Accrual basis, on the other hand, records expenses and revenue at the time they were incurred and earned, regardless of when paid and collected. Accrual basis is the required method of accounting to be used by the companies. Answer and Explanation: 1The answer is B) revenues on an accrual basis are greater than revenues on a cash basis. Please note that if accounts receivable increased during... See full answer below. Learn more about this topic:The Differences Between Accrual & Cash-Basis Accounting from Chapter 4 / Lesson 3 Learn about the difference between cash and accrual accounting. See accrual vs. cash basis accounting examples, and identify benefits of the two types of accounting. Related to this QuestionExplore our homework questions and answers libraryBread Basket provides baking supplies to restaurants and grocery stores. During December 2015, Bread Basket's employees worked 1,200 hours at an average rate of R20 per hour. At December 31, 2015, Bread Basket has paid R10,000 of salary expense. If Bread Basket fails to make the appropriate adjusting entry, which of the following is true regarding its December 31, 2015 statement of financial position? Big-Mouth Frog Corporation had revenues of $210,000, expenses of $120,000, and dividends of $30,000. When Income Summary is closed to Retained Earnings, the amount of the debit or credit to Retained Earnings is a Use the following information for questions 46 through 48: Use the following information for questions 50 through 52: The following balances have been excerpted from Olsen's statement of financial position: At the end of 2015, Diego Company made four adjusting entries for the following items: Garcia Corporation received cash of R$24,000 on August 1, 2015 for one year's rent in advance and recorded the transaction with a credit to Rent Revenue. The December 31, 2015 adjusting entry is Low Company received HK$9,600 on April 1, 2015 for one year's rent in advance and recorded the transaction with a credit to a nominal account. The December 31, 2015 adjusting entry is Caroline, Inc. hired a new controller in late 2015. The controller has not prepared financial statements using IFRS before and needs your assistance. In compiling a complete set of financial statements under IFRS, in what order should the following items be reported in the equity section on the statement of financial position at
December 31, 2015? If an item is not reported in the equity section, omit it from your answer. Rosalie Corporation is located in London but does business throughout Europe. The company builds and sells
equipment used in manufacturing pharmaceuticals. On December 31, 2015, Rosalie has trading securities valued at £63,000; goodwill valued at £450,000; prepaid insurance valued at £36,000; patents valued at £210,000; and a customer list valued at £390,000. On Rosalie Corporation's statement of financial position at December 31, 2015, what amount should be reported as intangible assets? During
2015 the DLD Company had a net income of W200,000. In addition, selected accounts showed the following changes: Harding Corporation reports the following
information: Caroline, Inc. had the following transactions during 2015: Exchanged land for a building $764,000 What is Caroline, Inc.'s net cash provided (used) by investing activities? Caroline, Inc. had the following transactions during 2015: Exchanged land for a building £764,000 What is Caroline, Inc.'s net cash provided (used) by financing activities? Packard Corporation reports the following information: c. $165,000. What happens when accounts receivable is increased?If a company's accounts receivable balance increases, more revenue has been earned with payment in the form of credit, so more cash payments must be collected in the future. On the other hand, if a company's A/R balance declines, the payments billed to the customers that paid on credit were received in cash.
What does ending accounts receivable mean?Closing Accounts Receivable means all accounts (including late fees and interest charges thereon) and notes receivable of the Company which are in existence as of the Closing Date.
When accounts receivable increases is it a debit or credit?The amount of accounts receivable is increased on the debit side and decreased on the credit side. When cash payment is received from the debtor, cash is increased and the accounts receivable is decreased.
When accounts receivable increases what decreases?Accounts receivable change: An increase in accounts receivable hurts cash flow; a decrease helps cash flow. The accounts receivable asset shows how much money customers who bought products on credit still owe the business; this asset is a promise of cash that the business will receive.
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