Use the following information for questions . Ling Company had the following transactions during 2011:
- Sales of $ ¥ 9,000 $ on account
- Collected $ ¥ 4,000 $ for services to be performed in 2012
- Paid $ ¥ 1,250 $ cash in salaries
- Purchased airline tickets for $ ¥ 500 $ in December for a trip to take place in 2012
-What is Ling's 2011 net income using accrual accounting?

Question

Quizplus · Accepted Answer

Under accrual accounting, revenue is recognized when earned and expenses when incurred. Sales of ¥9,000 are recognized as revenue. The ¥4,000 collected for future services is not recognized as 2011 revenue. The salary expense of ¥1,250 is recognized, but the airline ticket expense of ¥500 is not recognized until 2012. Thus, net income is $ ¥9,000 - ¥1,250 = ¥7,750 $.

Use the Following Information for Questions ¥9,000 ¥ 9,000 ¥9,000 On Account - Collected

Use the Following Information for Questions $¥ 9,000$ On Account
- Collected