Sales at the High-Price Furniture Store totaled 45,000 for the month of February. Of this amount, 20% was cash sales, 40% was collected during March, 30% during April, and 10% during May.
A. Determine the proper amount of revenue, expense, and cash flow that should be entered into the accounting system during each month shown. Use the format shown below. The first event is completed as an example.
B. What does this information suggest to you about the pattern in which accrual-based measures are recognized versus cash-based measures?
C. What does this suggest to you about a managerâ€™s need for both accrual information and cash flow information?