AMR Received $1,600 on a Sale Using the Cash Basis

question 64

Multiple Choice

AMR received $1,600 on a sale using the cash basis of accounting and did not record a sale on account. This transaction should have been recorded under accrual accounting. The balance sheet problem, using the cash basis of accounting, is the failure to record an entry to which account?

• A)Cash
• B)Accounts Receivable
• C)Sales
• D)Both Accounts Receivable and Sales

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Definitions:

Aristophanes

An ancient Greek playwright and a master of comedy, known for his satirical plays critiquing social, political, and cultural issues of Athens.

Fable

A short story, often featuring animals as characters, that conveys a moral lesson or truth about human nature and behavior.

Origins

Refers to the beginning or start of something, often relating to the historical roots or genesis of concepts, phenomena, or species.

Solipsism

The philosophical idea that only one's own mind is sure to exist, and the external world, as well as other minds, might not exist outside one's own perceptions.