F1 - 1.9 Matching of Revenues & Expenses

Question 1

Cash to Accrual Conversion - Explain the treatment of Increase and Decrease in Assets and Liabilities in case of Accrual Basis Expense Cash Basis Income

Answer 1

Cash to Accrual Conversion
Accrual Basis Expense Cash Basis Income
→ Increase in Liability (-)
→ Decrease in Liability (+)
→ Increase in Asset (+)
→ Decrease in Asset (-)

Question 1

Cash to Accrual Conversion - Explain the treatment of Increase and Decrease in Assets and Liabilities in case of Accrual Basis Income Cash Basis Expense

Answer 1

Cash to Accrual Conversion
Accrual Basis Income Cash Basis Expense
→ Increase in Liability (+)
→ Decrease in Liability (-)
→ Increase in Asset (-)
→ Decrease in Asset (+)