required information knowledge check 01 use the drop - down menus to indicate whether each of the following…

required information knowledge check 01 use the drop - down menus to indicate whether each of the following events would be recorded as revenues at the time it happens under the accrual - basis and cash - basis accounting methods. event accrual - basis cash - basis october: receive cash in advance from customers for services to be performed in november. november: receive cash for services performed in november. november: perform services for customers who paid in advance during october.

required information knowledge check 01 use the drop - down menus to indicate whether each of the following events would be recorded as revenues at the time it happens under the accrual - basis and cash - basis accounting methods. event accrual - basis cash - basis october: receive cash in advance from customers for services to be performed in november. november: receive cash for services performed in november. november: perform services for customers who paid in advance during october.

Answer

Explanation:

Step1: Understand accrual - basis

Under accrual - basis, revenue is recognized when earned, regardless of when cash is received.

Step2: Analyze first event

In October, receiving cash in advance for services to be performed in November is not revenue under accrual - basis as the service is not yet performed. It is a liability (unearned revenue). Under cash - basis, it is revenue as cash is received.

Step3: Analyze second event

In November, receiving cash for services performed in November is revenue under both accrual - basis (service is performed and cash is received) and cash - basis.

Step4: Analyze third event

In November, performing services for customers who paid in advance in October is revenue under accrual - basis (service is now performed) but not under cash - basis as no cash is received at this time.

Answer:

Event Accrual - Basis Cash - Basis
October: Receive cash in advance from customers for services to be performed in November. No Yes
November: Receive cash for services performed in November. Yes Yes
November: Perform services for customers who paid in advance during October. Yes No