(Entries Using Different Bases of Accounting)

a. Record each of the following transactions on (1) the cash basis, (2) the modified accrual basis, and (3) the accrual basis.

b. Explain the similarities and differences between the modified accrual and accrual bases of accounting.

Transcribed Image Text:

January 1 Billed customers $4,000 for services rendered. 3 Purchased $500 of supplies on account. 5 Purchased a truck costing $30,000 (to be paid for on February 3). 11 Collected $2,000 from customers on account. Recorded accrued wages to date, $3,000. Paid for supplies. Paid wages. Paid for the truck. 15 17 21 February 3 5 $200 of supplies have been used. 6 Depreciation on the truck for the month was $500.