When a service has been performed by a business but no cash has been received, which of the following statements is true: Question 3 Answer Income is recorded under both cash accounting and accrual accounting No income is recorded under cash accounting or accrual accounting Income is recorded under cash accounting Income is recorded under accrual accounting

Which of the following statements is correct?Multiple ChoiceIncome that has been earned but not yet received is called accrued income.Unearned Subscription Income is a liability account.Under the accrual basis of accounting, revenue is recognized and recorded in the period when it is earned regardless of when cash related to the transaction is received.All of these statements are correct.

Under accrual accounting, a business that receives cash in advance of performing a service for a client will: Question 5 Answer Record it as accrued income Record it as prepaid income Record it as an accrued expense Record it as a prepaid expense

On the statement of cash flows activities from operations include Blank______.Multiple choice question.cash received or spent on long term assetscash used in or provided by the firm's investment activitiescash transactions associated with running the businesscash incurred by taking on or repaying business debt

Which of these could not be classified as an operating activity in a statement of cash flows?Correct Answer  Loan repayments.   Payment of interest expense. You Answered  Cash received as payment for the sale of goods on credit in the previous year.   Cash dividends received.

The following statements relate to the business transactions topic. Choose all of the statements that are false:Question 3AnswerAll accrual accounting systems, no matter how simple or complex, follow the same basic recording rules.A numerical error in recording an item in the accounting system will become evident when the balance sheet does not balance.Generally speaking, business events are important and relevant for the entity but often lack the criteria to enable recording.Under ‘double entry’ accounting, all transactions will only affect a maximum of two elements in a business.An owner-related transaction that involves withdrawing inventory for personal use would affect the statement of cash flows.