Professional Documents
Culture Documents
Cash and Accrual Basis Test Bank
Cash and Accrual Basis Test Bank
Which of the following statements regarding accrual versus cash basis of accounting is true? =
The cash basis is less useful in predicting the timing and amounts of future cash flows.
When converting from cash basis to accrual basis of accounting, which of the following
adjustments should be made to cash paid for operating expenses to determine accrual basis
operating expenses to determine accrual basis operating expense? = Subtract ending prepaid
expense
Total net income over the life of an entity is = The same under the cash basis than under the
accrual basis
Under the accrual basis of accounting cash receipts and disbursements may = Precede, coincide
with, or follow the period in which revenue and expenses are recognized
Tower Company failed to recognize accruals and prepayments during the first year of operations.
The accruals and prepayments not recognized at the end of the year are: