Which transaction would be recorded in a cash basis system of accounting?
A) Purchase of equipment by signing a note
B) Purchase of supplies on credit
C) Sale of goods against a note
D) Sale of goods for cash

Question

Quizplus · Accepted Answer

In a cash basis system of accounting, only transactions involving actual cash inflows or outflows are recorded. Therefore, the sale of goods for cash would be recorded, but the other transactions involving notes or credit would not be recorded until the cash is actually received or paid.

Which Transaction Would Be Recorded in a Cash Basis System