Which of the following circumstances would result in an increase in income under the cash basis and an increase in income under the accrual basis?
A)The return of defective inventory purchased on account,where full credit was given
B)Cash collection from a credit customer
C)The cash sale of inventory at a sales price in excess of cost
D)The expiration of prepaid rent
E)The sale of inventory on account,at a sales price in excess of cost

Question

Quizplus · Accepted Answer

Under both cash and accrual accounting, the cash sale of inventory at a price higher than its cost results in an increase in income.

Which of the Following Circumstances Would Result in an Increase