During 2017, Dish Networks Inc. earned revenues of $700 million. Expenses totaled $540 million. Dish collected all but $20 million of the revenues and paid $530 million on its expenses. Dish's top managers are evaluating the year, and they ask you the following questions:
a. Under accrual accounting, what amount of revenue should the company report for 2017?
Is the $700 million revenue earned, or is it the amount of cash actually collected?
b. Under accrual accounting, what amount of total expense should Dish report for the year-$540 million or $530 million?
c. Which financial statement reports revenues and expenses? Which statement reports cash receipts and cash payments?