Question

1 point Which of the following account/s will be affected under the rule of accrual accounting, when furniture is purchased on cash? Only Furniture Account Only Cash Account Only Purchases Account Cash & Furniture Account

Answer 1

Answer:

furniture account and cash account

entry will be

furniture a/c. Dr.

to cash a/c

Answer 2

Cash and Furniture accounts will be affected under accrual accounting when furniture is purchased in cash.

Features of "accrual" accounting system:

• Under the accrual system of accounting, we record the transactions in the books when they take place and not when the payment is made or received.
• Even if the payment is not received in monetary form, the revenue is recognized as earned.
• All the expenses are matched against the revenues respectively according to the time period.
• Here furniture is purchased in cash. It will be recorded in the journal by debiting the furniture account and crediting the cash account.
• So, both the furniture account and the cash account are affected under the rules of accrual accounting.