When converting an income statement from a cash basis to an accrual basis,cash received for services:
A)Exceed service revenue.
B)May exceed or be less than service revenue.
C)Is less than service revenue.
D)Equals service revenue.

Question

Quizplus · Accepted Answer

When converting from a cash basis to an accrual basis, cash received for services may have been received in a different accounting period than when the service was actually performed. Therefore, it is possible for cash received for services to be less than or greater than service revenue.

When Converting an Income Statement from a Cash Basis to an Accrual