This transaction will increase net income under the accrual basis,but will not increase net income under the cash basis.
A)recording depreciation expense for the month
B)cash sale of inventory at a sales price in excess of cost
C)sale of inventory on account at a sales price in excess of cost
D)cash payment for rent

Question

Quizplus · Accepted Answer

Under the accrual basis, revenue is recognized when earned, so a sale on account increases net income. Under the cash basis, revenue is recognized when cash is received, so a sale on account does not affect net income until payment is received.

This Transaction Will Increase Net Income Under the Accrual Basis,but