BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cash
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Accounts Receivable
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Service Revenue
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Detailed explanation-1: -The accrual basis of accounting is the concept of recording revenues when earned and expenses as incurred. The use of this approach also impacts the balance sheet, where receivables or payables may be recorded even in the absence of an associated cash receipt or cash payment, respectively.
Detailed explanation-2: -Debits increase stockholders’ equity accounts, and vice versa for credits.
Detailed explanation-3: -When the bill is paid, the accountant debits accounts payable to decrease the liability balance. The offsetting credit is made to the cash account, which also decreases the cash balance.
Detailed explanation-4: -A credit entry increases liability, revenue or equity accounts-or it decreases an asset or expense account. Thus, a credit indicates money leaving an account. You can record all credits on the right side, as a negative number to reflect outgoing money.