Which of the following entries would be recorded if a company is using the cash-basis method of accounting?
A) $$\begin{array} { | l | r | r | }
\hline \text { Cash } & 1,000 & \
\hline \text { Accounts receivable } & & 1,000 \
\hline
\end{array}$$
B) $$\begin{array} { | l | r | r | }
\hline \text { Salary expense } & 1,000 & \
\hline \text { Salary payable } & & 1,000 \
\hline
\end{array}$$
C) $$\begin{array} { | l | r | r | }
\hline \text { Prepaid rent } & 1,000 & \
\hline \text { Cash } & & 1,000 \
\hline
\end{array}$$
D) $$\begin{array} { | l | r | r | }
\hline \text { Rent expense } & 1,000 & \
\hline \text { Cash } & & 1,000 \
\hline
\end{array}$$

Question

Which of the following entries would be recorded if a company is using the cash-basis method of accounting?
A) $$\begin{array} { | l | r | r | } 
\hline \text { Cash } & 1,000 & \
\hline \text { Accounts receivable } & & 1,000 \
\hline
\end{array}$$
B) $$\begin{array} { | l | r | r | } 
\hline \text { Salary expense } & 1,000 & \
\hline \text { Salary payable } & & 1,000 \
\hline
\end{array}$$
C) $$\begin{array} { | l | r | r | } 
\hline \text { Prepaid rent } & 1,000 & \
\hline \text { Cash } & & 1,000 \
\hline
\end{array}$$
D) $$\begin{array} { | l | r | r | } 
\hline \text { Rent expense } & 1,000 & \
\hline \text { Cash } & & 1,000 \
\hline
\end{array}$$

Quizplus · Accepted Answer

Under the cash-basis method of accounting, transactions are recorded only when cash is received or paid. In this case, rent expense is recorded when cash is paid, which is reflected in option D.

Which of the Following Entries Would Be Recorded If a Company