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    johnpk1217's Avatar
    johnpk1217 Posts: 1, Reputation: 1
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    #1

    Oct 14, 2008, 07:24 PM
    Cash Basis versus Accural Basis Income
    Reporting Cash Basis versus Accrual Basis Income
    Mostert Music Company had the following transactions in March:
    a. sold instruments to customers for $10,000; received $6,000 in cash and the rest on account.
    The cost of the instruments was $7,000.
    b. Purchased $4,000 of new instruments inventory; paid $1,000 in cash and owed the rest on Account.
    c. Paid $600 in wages for the month.
    d. Received a $200 bill for utilities that will be paid in April.
    e. Received $1,000 from customers as deposits on orders of new instruments to be sold to the Customers in April.
    dianazen's Avatar
    dianazen Posts: 1, Reputation: 1
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    #2

    Jun 8, 2009, 09:21 PM
    Reporting Cash Basis versus Accrual Basis Income
    Mostert Music Company had the following transactions in March:
    a. sold instruments to customers for $10,000; received $6,000 in cash and the rest on account.
    The cost of the instruments was $7,000.
    b. Purchased $4,000 of new instruments inventory; paid $1,000 in cash and owed the rest on Account.
    c. Paid $600 in wages for the month.
    d. Received a $200 bill for utilities that will be paid in April.
    e. Received $1,000 from customers as deposits on orders of new instruments to be sold to the Customers in April.
    pready's Avatar
    pready Posts: 3,197, Reputation: 207
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    #3

    Jun 9, 2009, 09:03 PM

    Cash basis accounting you only do journal entries when cash is received or spent.

    In Accrual basis accounting all your listed transactions require journal entries.
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