Cash, Modified Cash, Income Tax Flashcards

1
Q

How do cash based financial statements operate?

A
  • Based solely on cash receipts and disbursements
  • Cash received is revenue and cash paid is an expense
  • Balance sheet only shows Cash and Equity
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2
Q

How do modified cash basis financial statements operate?

A

-As a combination of elements of cash basis and accrual basis accounting

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3
Q

When is modified cash basis acceptable?

A

-If modification has substantial support in practice

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4
Q

What is required if modified cash basis used?

A

-All RELATED accounts must be reported using same basis of accounting

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5
Q

Under income tax basis of accounting, are nontaxable receipts and nondeductible payments recognized on Statement of Revenues and Expenses?

A

-Yes in one of 3 ways

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