_____ would result in unchanged income under both the accrual and the cash basis.
A)Recognition of the current period's depreciation
B)The payment of two months of rent in advance
C)The expiration of prepaid rent
D)None of these answers is correct

Question

Quizplus · Accepted Answer

Depreciation is an accrual basis concept and does not affect cash basis income. Payments made in advance (such as rent) affect the timing of expense recognition differently under cash and accrual basis accounting. The expiration of prepaid rent is recognized as an expense when it occurs under accrual basis but has no immediate effect on cash basis income since the cash outflow occurred at the time of payment. Therefore, none of the options would result in unchanged income under both the accrual and the cash basis.

_____ Would Result in Unchanged Income Under Both the Accrual