Crue Company had the following transactions during 2013 :
• Sales of $ 4,500 on account
• Collected $ 2,000 for services to be performed in 2014
• Paid $ 1,625 cash in salaries
• Purchased airline tickets for $ 250 in December for a trip to take place in 2014
What is Crue ’ s 2013 net income using cash basis accounting ? $ 375 . $ 4,875 . $ 4,625 . $ 125 . Multiple Choice Question 64 Which statement is correct ?
The cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received .
As long as management is ethical , there are no problems with using the cash basis of accounting .
As long as a company consistently uses the cash basis of accounting , generally accepted accounting principles allow its use .
The use of the cash basis of accounting violates both the revenue recognition and expense recognition principles .
Multiple Choice Question 61