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 cash basis accounting?

Question

Quizplus · Accepted Answer

Under cash basis accounting, revenue is recognized when cash is received, and expenses are recognized when cash is paid. Ling collected ¥4,000 for future services and paid ¥1,250 in salaries, resulting in a net income of ¥2,750 (¥4,000 - ¥1,250). The airline ticket purchase does not affect 2011 income as the trip is in 2012.

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