11Which of the following entries would be recorded ONLY if a company is using the accrual method of accounting?
A)Cash1,000
Accounts receivable1,000
B)Salary expense1,000
Cash1,000
C)Cash1,000
Service revenue1,000
D)Supplies1,000
Cash1,000
12Which of the following entries would be recorded if a company is using the cash-basis method of accounting?
A)Cash1,000
Accounts receivable1,000
B)Salary expense1,000
Salary payable1,000
C)Prepaid rent1,000
Cash1,000
D)Rent expense1,000
Cash1,000
13Which of the following is TRUE?
A) Accrual accounting is required by generally accepted accounting principles.
B) Accrual accounting records expenses when incurred. Cash-basis accounting records expenses when cash is paid.
C) Accrual accounting records revenue when services are rendered. Cash-basis accounting records revenue when cash is received.
D) All of the above are true.
14Which of the following situations would result in an increase in income under the accrual method of accounting, but would NOT result in an increase in income under the cash-basis method of accounting?
A) Purchase of supplies for cash
B) Performance of services on account
C) Use of supplies purchased earlier
D) Receipt of cash for services that were performed earlier on account
15Which of the following accounts would be used under the accrual method of accounting, but NOT under the cash-basis method of accounting.
A)Cash
B)Unearned revenue
C)Equipment
D)Salary expense