Which of the following circumstances would result in a decrease in income under both the accrual and cash basis?
A)The payment of last period's rent
B)The payment of this period's rent
C)The payment of next period's rent
D)The cash purchase of land
E)The purchase of equipment on account

Question

Quizplus · Accepted Answer

Under both the accrual and cash basis of accounting, the payment of this period's rent represents an expense that would decrease income. Rent expense reduces net income in the period it is incurred under both methods.

Which of the Following Circumstances Would Result in a Decrease