A company purchased $400 of office supplies on account during May. All the supplies were used in May, and the account was paid d

Question

2 years ago

7

A company purchased $400 of office supplies on account during May. All the supplies were used in May, and the account was paid d

uring June. What would the impact of these transactions be during May on (1) the balance of cash, (2) cash-basis net income, and (3) accrual-basis net income?

Business

1 answer:

rusak2 [61] · Answer 1 · 2022-06-27T13:37:54+03:00

Answer:

What would the impact of these transactions be during May on

(1) the balance of cash NO EFFECT, the account balance was not paid in May

(2) cash-basis net income: NO EFFECT, the account balance was not paid in May

(3) accrual-basis net income: DECREASE, even though the debt was not paid, the expense had already been recognized, therefore, the accrual-basis net income decreases