Which of the Following Entries Would Be Recorded If a Company

question 149

Multiple Choice

Which of the following entries would be recorded if a company is using the cash-basis method of accounting?

• A) \[\begin{array} { | l | r | r | }
• \hline \text { Cash } & 1,000 & \\
• \hline \text { Accounts receivable } & & 1,000 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | r | r | }
• \hline \text { Salary expense } & 1,000 & \\
• \hline \text { Salary payable } & & 1,000 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | r | r | }
• \hline \text { Prepaid rent } & 1,000 & \\
• \hline \text { Cash } & & 1,000 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | r | r | }
• \hline \text { Rent expense } & 1,000 & \\
• \hline \text { Cash } & & 1,000 \\
• \hline
• \end{array}\]

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Definitions:

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DSM-IV-TR

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