Expense recognition accrual basis vs. cash basis: Ring The Bells, Inc. provides doorbell repair services to
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- Expense recognition – accrual basis vs. cash basis: Ring The Bells, Inc. provides doorbell repair services to customers. On November 7th, Ring The Bells, Inc. paid $350 in cash to the utility company for utilities used in October. On November 16th, 2018, Ring The Bells, Inc. paid $4,800 in cash in advance for the next 12 months’ rent, covering rent for the period of December 1, 2018 – November 30, 2019. On November 30th, 2018 Ring the Bells paid $1,000 in cash for November’s advertising expenses.
- Using accrual-basis accounting, how much in expenses would Ring the Bells record for November 2018? Briefly explain or show how you got your answer.
- Using cash-basis accounting, how much in expenses would Ring the Bells record for November 2018? Briefly explain or show how you got your answer.
Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
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