Question

Fantastic Catering completed the following selected transactions during May 2016: . • May 1: Prepaid rent for three months, $3,000 May 5: Received and paid electricity bill, $70 May 9: Received cash for meals served to customers, $2,700 • May 14: Paid cash for kitchen equipment, $2,700 • May 23: Served a banquet on account, $2,900 • May 31: Made the adjusting entry for rent (from May 1). May 31: Accrued salary expense, $1,700 • May 31: Recorded depreciation for May on kitchen equipment, $100 Amount of Revenue (Expense) for May Cash Basis Accrual Basis 3000 May 1 I May 5 May 9 May 14 May 23 May 31 May 31 May 31 UTCATCHFITS Teserveu. TV PUNCT TESTOST

Answer 1

Difference Between Accrual and Cash Basis Accounting 1 Cash Basis Accounting. The cash basis accounting method is the system used by most people for their personal finances, such as keeping track of the balance in their checking accounts. 2 Accrual Basis Accounting. Accounting on an accrual basis is intended to match up revenue and expenses with they are incurred or delivered, without regard to when payment is issued

AMOUNT OF REVENUE(EXPENSE)FOR MAY

	CASH BASIS	ACCRUAL BASIS
MAY 1	3000	0
MAY 5	0	70
MAY 9	2700	2700
MAY 14	2700	2700
MAY 23	0	2900
MAY 31	0	1000
MAY 31	0	1700
MAY 31	100	100