The following information pertains to Sooner Company: Assuming that Sooner Company uses cash-basis accounting,when would the company record the expense related to the supplies?
$$\begin{array} { | l | l | }
\hline \text { May } 1 & \text { Customer ordered an installation service to be done by Sooner Company on May } 15 . \
\hline \text { May } 2 & \text { Customer paid cash tor the installation job to be done on May } 15 . \
\hline \text { May } 8 & \text { The Sooner Company purchased installation supplies on account tor the job. } \
\hline \text { May } 15 & \text { The installation job was started and completed. } \
\hline \text { May } 20 & \text { Amount owed for supplies purchased on May } 8 \text { is paid. } \
\hline
\end{array}$$
A)May 2.
B)May 8.
C)May 15.
D)May 20.

Question

The following information pertains to Sooner Company: Assuming that Sooner Company uses cash-basis accounting,when would the company record the expense related to the supplies?
$$\begin{array} { | l | l | } 
\hline \text { May } 1 & \text { Customer ordered an installation service to be done by Sooner Company on May } 15 . \
\hline \text { May } 2 & \text { Customer paid cash tor the installation job to be done on May } 15 . \
\hline \text { May } 8 & \text { The Sooner Company purchased installation supplies on account tor the job. } \
\hline \text { May } 15 & \text { The installation job was started and completed. } \
\hline \text { May } 20 & \text { Amount owed for supplies purchased on May } 8 \text { is paid. } \
\hline
\end{array}$$
A)May 2.
B)May 8.
C)May 15.
D)May 20.

Quizplus · Accepted Answer

Under cash-basis accounting, expenses are recorded when cash is paid out. Therefore, Sooner Company would record the expense for the supplies on May 20, the date the cash was paid for the supplies.

The Following Information Pertains to Sooner Company: Assuming That Sooner