Access over 20 million homework & study documents

Financial Accounting Matching Concept Presentation

Content type
User Generated
Showing Page:

Sign up to view the full document!

lock_open Sign Up
Showing Page:

Sign up to view the full document!

lock_open Sign Up
Showing Page:

Sign up to view the full document!

lock_open Sign Up
End of Preview - Want to read all 8 pages?
Access Now
Unformatted Attachment Preview
Financial accounting: Session Three Dr Meena Bhatia Matching Concept • The matching concept is an accounting practice whereby expenses are recognized in the same accounting period as the related revenues are recognized. The period's revenues, that is, are reported along with the expenses that brought them. • The matching concept thus helps avoid misstating earnings for a period. Reporting revenues for a period without reporting all the expenses that brought them, and just those expenses, could result in overstated or understated profits. • Applying the concept requires accrual accounting, the practice of recognizing revenues when they are earned and expenses when they are incurred--not necessarily when cash actually flows in those transactions. Statement of Profit & Loss Schedule VI Cost of materials consumed • This disclosure is applicable for manufacturing companies. Materials consumed would consist of raw materials, packing materials (where classified by the company as raw materials) and other materials such as purchased intermediates and components which are ‘consumed’ in the manufacturing activities of the company. Where packing materials are not classified as raw materials the consumption thereof should be disclosed separately. However, intermediates and components which are internally manufactured are to be excluded from the classification: Internally manufactured intermediates or components consumed i. where such components are sold without further ...
Purchase document to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Really useful study material!