Question

Yankton Company had sales of $240,000 during 20X0, all on account. Accounts receivable for the year grew from $50,000 on January 1 to $110,000 on December 31. Expenses for the year were $170,000, all paid in cash.
1. Compute Yankton’s net income on the cash basis of accounting.
2. Compute Yankton’s net income on the accrual basis of accounting.
3. Which basis gives a better measure of Yankton’s performance for 20X0? Why?



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  • CreatedFebruary 20, 2015
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