During June,the Grass Is Greener Company Mows 100 Lawns a Week

question 36

Multiple Choice

During June,the Grass is Greener Company mows 100 lawns a week and is paid in July by those customers.The company uses the accrual basis of accounting.Which financial statement is impacted by these transactions?

• A) The income statement shows the effects of the transactions in June.
• B) The income statement shows the effects of the transactions in July.
• C) The balance sheet shows no effect from the transactions in June.
• D) The transactions have no effect on the balance sheet.

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Definitions:

Personal Assets

Items of economic value owned by an individual, which can include tangible items like property and vehicles or intangible assets.

Proprietorship

A business structure owned by a single individual where there's no legal distinction between the owner and the business entity.

Legal Dissolution

The process of legally dissolving a company, terminating its existence by the law.

New Partner

An individual who joins an existing partnership, contributing capital, and sharing in profits, losses, and liabilities.