Reference no: EM132943479

Problem 1: Which type of business might use statement charges to bill customers?

Option 1: A restaurant that provides catering services

Option 2: A janitorial business that charges a routine monthly service fee

Option 3: A nonprofit agency that receives all of its funding from one agency

Option 4: An accounting firm that provides many details about services billed

Problem 2: Two methods were shown for tracking deposits and prepayments from customers. What was the primary difference between the two methods?

Option 1: The first method includes a provision for bad debts while the second method does not.

Option 2: The first method assumes cash basis while the second method assumes accrual basis.

Option 3: The first method assumes payment via a credit card. The second method assumes payment with a check or cash.

Option 4: The first method shows the deposits as a negative receivable. The second method shows the deposits as a current liability.