If a Company Is Using the Cash-Basis Method of Accounting,when

question 19

Multiple Choice

If a company is using the cash-basis method of accounting,when is revenue recorded?

• A) When services are rendered, even though cash may be received at a later date
• B) When cash is received, prior to the services being rendered
• C) When cash is received, at a time after the services were rendered
• D) When cash is received, either prior to the services being rendered or at a time after the services were rendered

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Definitions:

Total Assets

The aggregate of all monetary values of everything a company owns or controls, with economic value expected to provide a future benefit.

Stockholders' Equity

The amount of assets remaining in a company after all liabilities have been deducted, essentially representing the owners' claim on the company's assets.

Market Price

is the current price at which an asset or service can be bought or sold in a competitive marketplace.

Common Stock

A type of equity security that represents ownership in a corporation, entitling the holder to a share of the company's profits through dividends and/or capital appreciation.