Question

1) If goods are sold on January1,,on 2months credit, then as per cash basis of accounting, the sale will be recorded in the month of _________.​

Answer 1

Answer:

6month because good are solding continue

Answer 2

Answer:

If goods are sold on January1 on 2months credit, then as per cash basis of accounting, the sale will be recorded in the month of March.

Explanation:

Cash basis of accounting:

The cash basis of accounting refers to a significant accounting concept in which revenues and expenses are recognized and recorded when cash is received or paid out. This is in contrast to the accrual basis of accounting, under which income is recognized when the revenue is earned, and expenses are recorded at the time they are incurred regardless of whether cash is received or paid.

Now, according to the question:

Goods are sold on January 1 on 2 months credit.
∴ According to the cash basis of accounting, sales will be recorded when actual cash is received from the debtor who purchased the goods on January 1, i.e., in the month of March.

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