Submit Test This Question: 1 pt 16 of 16 This Test: 16 pts possible Total Pool S

Question

Submit Test This Question: 1 pt 16 of 16 This Test: 16 pts possible Total Pool Services earned $150,000 of service revenue during 2016. Of the $150,000 earned, the business received $124,000 in cash The remaining amount, $26,000, was stil owed by customers as of December 31. In addition, Total Pool Services i Incurred $75,000 of expenses during the year As of December 31, 512,000 of the expenses still needed to be paid In addition, Total Pool Services prepaid $6,000 cash in December 2016 for expenses incurred during the next 1. Determine the amount of service revenue and expenses for 2016 using a cash basis accounting system 2. Determine the amount of service revenue and expenses tor 2016 using an accrual basis accounting system 1. Determine the amount of service revenue and expenses for 2016 using a cash basis accounting system. Cash basits Service revenue Expenses 2. Determine the amount of service revenue and expenses for 2016 using an acorual basis accounting system Accrual basis Service revenue 150,000 Enter any number in the edit Selds and then continue to the next question

Explanation / Answer

Cash Basis 1 Service Revenue Service Expenses $               124,000 $                         68,000 (75000-12000+5000) 2 Accrual basis Service Revenue Service Expenses $               150,000 $                         75,000 Cash basis accounting all income received in cash expenses paid in cash. Accrual basis includes all income earned and expenses during the year irrespective of paid or not.

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