BASIC OF CASH AND ACCRUAL ACCOUNTING

All of the following are sources of expenses EXCEPT

• Machinery fuel

• Sales of good

• Cost of good sold

• Wages

Revenue is recorded when __________ for sale of product or service for cash accounting

In accrual accounting, revenue is recorded when it is _________

Accrual accounting is preferred by business except because

• It is easier to understand

• It can be used to predict cash receipts

• It gives a more accurate estimation of profit

• It shows past transaction

One of accrual accounting advantages is

• Simple and easy to use

• Delay tax for growing crops

• Cheap

• Accurate estimation of profit

Expense is recorded when _____________ for accrual accounting

Loss happens when there is _________ or __________ (you can choose more than one answer)

• fluctuation in asset value

• a decrease in asset value

• money the company spend to cover for necessary adjustment

• money the company spend to cover for unexpected revenue

Income from renting out your machinery can be considered as _______

Cash basis and accrual basis accounting is differentiate based on the __________ of when cash flow and revenue/expenses recognise

The followings are disadvantages of cash accounting EXCEPT

• It does not coincide with matching concept.

• Require little to no knowledge in accounting

• Less accurate

• Require more time