T6-Solutions to Additional Q-ns.docVIP

SOLUTIONS Preparing Financial Reports Tutorial 6 - Class work Cash Flows Question 1 – Cash and accrual accounting A credit sale by Underwood Importers took place on 6th May and the cash was received from the customer on 18th June. In which month would the revenue be recognised as being earned under: a) Cash-basis accounting? June b) Accrual-basis accounting? May Mitchell’s Mechanical Repairs purchased spare parts on 29th January and used them for a repair job that day. The business paid for them on 2nd March. When the expense would be recognised under: a) Cash-b