MCQs on Accrual Basis Accounting

In January, a restaurant chain sells food to customers for $50,000 cash. Under the accrual basis of accounting, when should this revenue be recorded?

• January

• February

• When cash is collected

• When expenses are paid

A company sells a franchise for $5,000 in January, providing $2,000 in immediate services and the rest over five months. How much revenue is recognized in January?

• $0

• $2,000

• $5,000

• $3,000

A company delivers goods worth $3,500 to a customer on account in January. The customer will pay in February. When is revenue recorded?

• January

• February

• March

• When cash is received

Customers pay $2,500 in advance for services to be provided in March. When is revenue recognized?

• January

• March

• When cash is received

• February

A business receives $400 in January for deposits on future orders to be delivered in April. How much revenue is recorded in January?

• $0

• $400

• $200

• $100

A company pays $6,000 in rent for January, February, and March. How much expense is recorded in January?

• $6,000

• $2,000

• $3,000

• $1,000

In January, a company pays $8,000 for supplies that were received in December. When should the expense be recorded?

• December

• January

• February

• When paid

A company purchases office supplies worth $1,200 on account in January and pays in February. When should the expense be recorded?

• January

• February

• March

• When cash is paid

In January, a company uses $4,500 in paper and packaging supplies purchased on account in December. When is the expense recorded?

• December

• January

• February

• When cash is paid

A company receives a $500 electricity bill for January, which will be paid in February. When should the expense be recorded?

• January

• February

• When paid

• December