Respuesta :
Answer:
Step-by-step explanation:
Net income under cash basis
Revenues 56,000
Expenses [24,100+9500] 33,600
Net income 22,400
Net income under accrual basis
Revenues 56,000
Expenses 31,000
Net income 25,000
Answer:
Net income;
Under accrual basis is $25,000
Under cash basis is $14,400
Step-by-step explanation:
Under the accrual basis of accounting, revenue is recognized when it is earned and not necessarily when cash is collected. Services may be rendered on account or cash.
Expense may be incurred on account or cash basis. In the accrual system, the expense is recorded once it is incurred and not necessarily when cash is collected.
In the cash basis, both revenue and expense are only recognized when cash is collected and paid respectively.
Net income is the difference between the revenue and the expenses for a given period.
Under accrual basis,
net income = $56,000 - $31,000
= $25,000
Under the cash basis,
Net income = $48,000 - $24,100 - $9,500
= $14,400
