The following information pertains to Sooner Company:
May 1 $\quad$Customer ordered an installation service to be done by Sooner Company on May 15.
May 2 $\quad$Customer paid cash for the installation job to be done on May 15.
May 8 $\quad$The Sooner Company purchased installation supplies on account for the job.
May 15$\quad$ The installation job was started and completed.
May 20 $\quad$Amount owed for supplies purchased on May 8 is paid.
Assuming that Sooner Company uses cash-basis accounting,when would the company record the expense related to the supplies?

Question

The following information pertains to Sooner Company:
May 1 $\quad$Customer ordered an installation service to be done by Sooner Company on May 15.
May 2 $\quad$Customer paid cash for the installation job to be done on May 15.
May 8 $\quad$The Sooner Company purchased installation supplies on account for the job.
May 15$\quad$ The installation job was started and completed.
May 20 $\quad$Amount owed for supplies purchased on May 8 is paid.
 Assuming that Sooner Company uses cash-basis accounting,when would the company record the expense related to the supplies?

Quizplus · Accepted Answer

Under cash-basis accounting, expenses are recorded when they are paid. Therefore, the expense related to the supplies would be recorded on May 20 when the payment is made.

The Following Information Pertains to Sooner Company: May 1 \quad Customer Ordered an Installation Service to Be Done by Sooner

The Following Information Pertains to Sooner Company:
May 1 $\quad$ Customer Ordered an Installation Service to Be Done by Sooner