Consider the following events for Betterment Incorporated:
January 1 Betterment purchases gasoline for $200 on account.
January 7 Betterment advertises lawn mowing services for $100 per lawn.
January 9 Betterment signs up 8 customers who pay a total of $800 cash.
January 12 Betterment mows the lawns of the 8 customers and all gasoline purchased on January 1 is used.
January 13 Betterment pays for the gasoline purchased on January 1.
Under cash-basis accounting, what is the appropriate day to record the expenses related to the gasoline?
A) January 1.
B) January 9.
C) January 12.
D) January 13.
Answer: D
Consider the following events for Sophia Incorporated:
April 5 Sophia purchases volleyballs for $200 on account.
April 6 Sophia advertises a sand volleyball camp for $20 a person.
April 12 Thirty people sign up for the camp paying a total of $600.
April 21 Sophia hosts the sand volleyball camp.
April 23 Sophia pays for the volleyballs purchased on April 5.
Under accrual-basis accounting, what is the appropriate day to record the revenues from the sand volleyball camp?
A) April 5.
B) April 6.
C) April 12.
D) April 21.
Answer: D
Consider the following events for Sophia Incorporated:
April 5 Sophia purchases volleyballs for $200 on account.
April 6 Sophia advertises a sand volleyball camp for $20 a person.
April 12 Thirty people sign up for the camp paying a total of $600.
April 21 Sophia hosts the sand volleyball camp.
April 23 Sophia pays for the volleyballs purchased on April 5.
Under accrual-basis accounting, what is the appropriate day to record the expenses related to the sand volleyball camp?
A) April 5.
B) April 12.
C) April 21.
D) April 23.
Answer: C