Reference no: EM132513807

Problem 1) Guardian Corp. sells $6,250 of goods on account in the current year and collects $3,250 of this. It incurs $4,200 in expenses on account during the current year and pays $2,600 of them. Guardian would report what amount of net income under the cash and accrual bases of accounting, respectively?

Select one:

a. $650 on the cash basis and $2,050 on the accrual basis

b. $3,250 on the cash basis and $4,200 on the accrual basis

c. $2,050 on the cash basis and $3,000 on the accrual basis

d. $3,000 on the cash basis and $1,600 on the accrual basis

Problem 2) Expenses are identified by the type of liability associated with them.

Select one:

True

False

Problem 3) Expenses are identified by the type of liability associated with them.

Select one:

True

False