Question 41 Not yet answered Marked out of 1.00 P Flag quesion O 14. C4.Which of

Question

Question 41 Not yet answered Marked out of 1.00 P Flag quesion O 14. C4.Which of the following is NOT true concerning cash accounting and accrual accounting? Select one: 0 a. For tax purpose, tax authorities recognize accrual accounting rather than cash accounting O b. Accrual accounting recognizes transactions when they are incurred, but cash accounting only recognizes transactions when they are immediately cash settled O c. Accrual accounting is less complicating than cash accounting O d. Accrual accounting is more complicating than cash accounting

Explanation / Answer

Solution 14:

The following statement is not true concerning cash accounting and accrual accounting:

1. Accrual accouting is less complicating than cash accounting.

In fact accrual accounting is more complicating than cash accounting as it involves complex transaction though in cash accouting transaction is recognized only on the basis of cash settlement.

Hence option c is correct.

Solution 15:

Debit to cash represents cash received and credit to Sue hong represents cash received from Sue hong.

Hence option a is correct.

Solution 16:

The allowance for doubtful accounts:

a. Is debited when uncollectible accounts are written off

b. Is a contra asset account

c. Is credited when bad debts expense is estimated and recorded

d. Is used instead of reducing accounts receivables directly

Hence all above are true. Therefore option c is correct.

Solution 10:

Sole proprietor business is having unlimited liability. There liability are not limited up to the capital invested in business. Hence option c is correct.

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