Solution for QID #91430: Academic Consultants Inc. had the following selected transac | StudyHelpMe

Academic Consultants Inc. had the following selected transactions in August 2016:   ug. 1 Prepaid insurance for August through December $1,000 Aug. 4 Purchased software for cash $800 Aug. 5 Performed service and received cash $900 Aug. 8 Paid advertising expense $300 Aug. 11 Performed service on account $3,000 Aug. 19 Purchased computer on account $1,600 Aug. 24 Collected for the August 11 service Aug. 26 Paid account payable from August 19 Aug. 29 Paid salary expense $900 Aug. 31 Adjusted for August insurance expense (see Aug 1) Aug. 31 Earned revenue of $800 that was collected in advance in July.   1         Show how each transaction would be handled using the cash basis and the accrual basis. Under each column, give the amount of revenue or expense for August. Journal entries are not required. Use the following format for your answer and show your computations. Academic Consultants Inc. Amount of Revenue (Expense) for August 2016. Date Cash Basis   Accrual Basis   Aug 1 Revenue / (Expenses) Amount Revenue / (Expenses) Amount   2         Compute August income (loss) before tax under each accounting method. 3         Explain which measure of net income or net loss is preferable.