Good day, regarding the electricity (expense) both the cash and the profit went down. Why didn’t the expense only reduce the profit and not both cash and profit?
Why Is it that when we partially pay a payable the profit does not change and instead the cash position changes, but when we pay electricity the profit goes down? Are they not the same? Both an expense in running the business? or is it something to do with direct and indirect costs? Thanks in advance
The expense against the profit is the expense for the period in question regardless of whether or not it was paid during the period (or whether it was still owing at the end of the period and therefore paid in the next period).
If we use $100 worth of electricity this month, then it is an expense in this month even if it is not paid for until next month.
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Good day, regarding the electricity (expense) both the cash and the profit went down. Why didn’t the expense only reduce the profit and not both cash and profit?
Thanks in advance
Because they paid money out of their cash for the electricity bill.
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well explained
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really helped me a lot
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Well explained
Why Is it that when we partially pay a payable the profit does not change and instead the cash position changes, but when we pay electricity the profit goes down? Are they not the same? Both an expense in running the business? or is it something to do with direct and indirect costs? Thanks in advance
The expense against the profit is the expense for the period in question regardless of whether or not it was paid during the period (or whether it was still owing at the end of the period and therefore paid in the next period).
If we use $100 worth of electricity this month, then it is an expense in this month even if it is not paid for until next month.
Thank you for your support… really understand it well…Thanks Open Tuition…asking if I do FFA,FBT and FMA will I get certificate…and when is the deadline for this syllabus exam…
I just started doing ACCA . Thanks for the lectures. They are making my life simple a lot of thanks
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I can not open the vedio
I am guessing that it is because YouTube is blocked in your country. Many do watch the videos using a VPN.