What is the accrual basis of accounting


Response to the following problem:

The following is selected information from Alpha-Beta-Gamma Corporation for the fiscal year ending October 31, 2010.

Cash received from customers $300,000

Revenue earned 350,000

Cash paid for expenses 170,000

Cash paid for computers on November 1, 2009 that will be used for 3 years (annual depreciation is $16,000) 48,000

Expenses incurred, not including any depreciation 200,000

Proceeds from a bank loan, part of which was used to pay for the computers 100,000

Based on the accrual basis of accounting, what is Alpha-Beta-Gamma Corporations net income for the year ending October 31, 2010?

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Accounting Basics: What is the accrual basis of accounting
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