Pawn Shops Unlimited recorded the following four transactions during April. Which of these transactions would have the same income statement impact in April regardless of whether the company used accrual-basis or cash-basis accounting?
A) Purchased $500 of office supplies on account (supplies were used in May and paid for in May).
B) Paid $1,800 for a six-month insurance policy covering the period July 1—December 31.
C) Paid $700 for an advertisement that appeared in the May 17 edition of the Las Vegas Sun newspaper.
D) Received $300 from customers for services performed in March.
Ch3 answer: A
When a company provides services on account, which of the following would be recorded using cash-basis accounting?
A) Debit to Cash.
B) Debit to Service Revenue.
C) Credit to Deferred Revenue.
D) No entry would be recorded.
Answer: D
