Pawn Shops Unlimited Recorded the Following Four Transactions During April

question 118

Multiple Choice

Pawn Shops Unlimited recorded the following four transactions during April.Which of these transactions would have the same income statement impact in April regardless of whether the company used accrual-basis or cash-basis accounting?

• A)Received $600 from customers for services to be provided in May.
• B)Paid $1,800 for a six-month insurance policy covering the period July 1-December 31.
• C)Paid $700 for an advertisement that appeared in the April 17 edition of the Las Vegas Sun newspaper.
• D)Received $300 from customers for services performed in March.

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Definitions:

Interest Revenue

Income earned from lending funds or through investing in interest-bearing financial instruments.

Gain Sale Building

The profit realized from the sale of a building asset.

Balance Sheet

A report documenting an organization's financial status, including its assets, liabilities, and the equity owned by shareholders, as of a certain date.

Buildings Equipment

Fixed assets such as physical structures and machinery owned by a business for use in operations, not for immediate resale.