Under accrual basis accounting expenses are recognized

when incurred which #2690

Under accrual basis accounting, expenses are recognized when incurred, which means the
activity giving rise to the expense has occurred. Assume the following transactions occurred in
January: a. Dell paid its computer service technicians $ 90,000 in salary for work done in
January. Answer from Dell’s standpoint. b. At the beginning of January, Turner Construction
Company paid $ 3,000 in rent for February– April. c. McGraw- Hill Education — publisher of this
textbook— used $ 3,000 worth of electricity and natural gas in January for which it has not yet
been billed. d. Pooler Company received and paid in January a $ 1,500 invoice from a
consulting firm for services received in January. e. The campus bookstore received consulting
services at a cost of $ 5,000. The terms indicate that payment is due within 30 days of the
consultation. f. Schergevitch Incorporated had its delivery van repaired in January for $ 280 and
charged the amount on account.Required:For each of the transactions, if an expense is to be
recognized in January, indicate the amount. If an expense is not to be recognized in January,
indicate why.View Solution:
Under accrual basis accounting expenses are recognized when incurred which

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