22) Clean Sweep contracted to clean an office building in May for $2,000. The work was completed in May and Clean Sweep received a payment of $1,800. The second payment was received in June. How were these events reported on the May 31 financial statements?
23) Clean Sweep contracted to clean an office building in July for $1,500. The work was contracted in July. The building was completely cleaned in August and Clean Sweep received a payment of $500. The remaining payment of $1,000 was received in September. Discuss how this event would be reported in the monthly financial statements for July, August and September.
24) Clean Sweep agreed to clean an office building on a weekly basis for $1,000 per week. The contract began on August 15, and Clean Sweep cleaned the building twice during August. Clean Sweep received $1,000 cash in August. During August, Clean Sweep spent $400 on wages for the workers who cleaned the building, $90 for the cleaning supplies used, and $4,000 to purchase specialized cleaning equipment. How much revenue should Clean Sweep recognize in August using accrual accounting?
25) Clean Sweep agreed to clean an office building on a weekly basis for $1,000 per week. The contract began on August 15, and Clean Sweep cleaned the building twice during August. Clean Sweep received $1,000 cash in August. During August, Clean Sweep spent $400 on wages for the workers who cleaned the building, $90 for the cleaning supplies used, and $4,000 to purchase specialized cleaning equipment. How much revenue should Clean Sweep recognize in August using cash-basis accounting?
26) Explain the differences between accruals and deferrals.
27) Explain the differences between cash-basis and accrual accounting.