If a company is using accrual basis accounting, when should it record revenue?
When cash is received, even though services may be performed at a later date
When services are performed, even though cash may be received at a later date
Before services are performed
When cash is received, 30 days after the completion of the services
ABC Tax Planning Service started business in January 2018. The company rented an office for $1,800 per
month starting from January 1, 2018. On that day, ABC prepaid the rent through June 30. The company
makes adjusting entries at the end of each month. What is the balance in the Prepaid Rent account as of
April 30, 2018?
A business purchased equipment for $145,000 on January 1, 2019. The equipment will be depreciated
over the five years of its estimated useful life using the straight-line depreciation method. The business
records depreciation once a year on December 31. Which of the following is the adjusting entry required
to record depreciation on the equipment for the year 2019? (Assume the residual value of the acquired
equipment to be zero.)