Principles Acct I student Homework Chap 3A - Suggested Exercises Chapter 3 E3-19 Comparing cash and accrual basis accounting and applying the

Principles Acct I student Homework Chap 3A - Suggested...

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Suggested Exercises Chapter 3 E3-19Comparing cash and accrual basis accounting and applying the revenue recognition principle and the matching principleLearning Objectives 1, 2Chef’s Catering completed the following selected transactions during May 2018:Requirements1.Show whether each transaction would be handled as a revenue or an expense using both the cash basis and accrual basis accounting systems by completing the following table. (Expenses should be shown in parentheses.) Also, indicate the dollar amount of the revenue or expense. The May 1 transaction has been completed as an example.2.After completing the table, calculate the amount of net income or net loss for Chef’s Catering under the accrual basis and cash basis accounting systems for May.3.Considering your results from Requirement 2, which method gives the best picture of the true earnings of Chef’s Catering? Why? Page 1
SOLUTION Requirement 1 Amount of Revenue (Expense) for May Date Cash Basis Amount of Revenue (Expense)

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