BUSS1030 Lecture Notes - Lecture 7: Income Statement, Matching Principle, Accrual

• School: University of Sydney
• Department: Business Studies
• Course: BUSS1030
• Professor: Abdul Razeed

Document Summary

Administration and general financial regulatory reports required to be produced by companies and other entities in accordance to statutory standards: aasb requires that income statement should classify expense according to their nature of function. Amount of revenue can be measured reliably. Probable that the economic benefits will be received: criteria where the revenue comes from the sale of goods. Alternatively, cash may be received in advance of revenue being recognised revenue is recognised on the basis that it has been earned irrespective of whether the cash receipt is in arrears or advance. Deemed to be earned when it is realised; realisation being closely linked to probability of occurrence and reliability of measurement. Cash accounting means recognising transactions at the time when cash flows take place recognition of expenses. 3: matching convention in measuring income, expenses should be matched to the revenue they helped generate in the same accounting period as those revenue are realised three possibilities when recognising expenses.