Which of the following entries would be recorded if a company uses the cash basis method of accounting?
A) $$\begin{array} { | c | r | r | }
\hline \text { Cash } & 1,000 & \
\hline \text { Accounts Receivable } & & 1,000 \
\hline
\end{array}$$
B) $$\begin{array} { | c | r | r | }
\hline \text { Salary Expense } & 1,000 & \
\hline \text { Salary Payable } & & 1,000 \
\hline
\end{array}$$
C) $$\begin{array} { | c | r | r | }
\hline \text { Prepaid rent } & 1,000 & \
\hline \text { Cash } & & 1,000 \
\hline
\end{array}$$
D) $$\begin{array} { | r | r | r | }
\hline \text { Rent Expense } & 1,000 & \
\hline \text { Cash } & & 1,000 \
\hline
\end{array}$$

Question

Which of the following entries would be recorded if a company uses the cash basis method of accounting?
A) $$\begin{array} { | c | r | r | } 
\hline \text { Cash } & 1,000 & \
\hline \text { Accounts Receivable  } & & 1,000 \
\hline
\end{array}$$ 
B) $$\begin{array} { | c | r | r | } 
\hline \text { Salary Expense } & 1,000 & \
\hline \text { Salary Payable } & & 1,000 \
\hline
\end{array}$$
C) $$\begin{array} { | c | r | r | } 
\hline \text { Prepaid rent } & 1,000 & \
\hline \text { Cash } & & 1,000 \
\hline
\end{array}$$
D) $$\begin{array} { | r | r | r | } 
\hline \text { Rent Expense } & 1,000 & \
\hline \text { Cash } & & 1,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The cash basis method only records transactions when cash is received or disbursed, so option D is the only entry that fits this criteria. The other options involve accounts such as accounts receivable or salary payable, which would not be recorded under the cash basis method.

Which of the Following Entries Would Be Recorded If a Company