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