Question 21 of 50 Question 21 2 points Save se e Company use

Question 21 of 50 Question 21 2 points Save se e Company uses the accrust bas of accouring Each oft the llowig nts o curred during Auust Which one &f; thiem sheuld be reported as a O A Office supples costing $800 were used in August They had been parchased and pait for during May B.Anew delvery truck was purchased oo the last day of Agust it was not pu inun September C On Auut and 50,000 was gaid to employes for hours worked furing the monty of y D Near the end ofgst Septenbers et of 1.500 was ped in advance expense for Augus Ls

Solution

Answer 21 - A. A office supplies costing $800 were used in August. They had been purchased and paid for during May. As per accrual basis of accounting, expenses are recognized as expenses in the accounting period in which the revenue related to it is recognized, whether paid in cash or not. In Option B - Delivery Truck is purchased and will be recorded as fixed assets and will be Shown in the Balance Sheet. In Option C - Cash paid for the salary for the month of July in the Month of August, this means Salary expense will be recognized in the Month of July and in august only the Salary Payble for the m/o July is paid. In Option D - Rent is paid for the Sepemeber, it means it is expenses paid in advance and it will show as current assets section of Balance Sheet for the month ended August. Option A is correct, since supplies are used in the m/o August, and will be recorded as supplies expenses as per Accrual Basis of Accounting Answer 24 - D. Income Statement Income Statement is a summary of how the company incurs its revenues and expenses through both operating and non-operating expenses. All other options is incorrect. Option A - Statement of Retained Earnings - reconciles changes in the retained earnings account during a reporting period. The statement begins with the beginning balance in the retained earnings account, and then adds or subtracts such items as profits and dividend payments to arrive at the ending retained earnings balance. Option B - Balance Sheet - summarizes a company\'s assets, liabilities and shareholders\' equity at a specific point in time. Option C - Cash Flow Statement - that shows how changes in balance sheet accounts and income affect cash and cash equivalents, and breaks the analysis down to operating, investing and financing activities.