[Julia2001]

Hi,

I’m confused with “royalties on good sold” is this included in the manufacturing account ? Bpp revision kit excludes it while Kaplan includes it in the manufacturing account. Could you please clarify this ?

Thank you

[Julia2001]

Hello,

Thank you for your reply. I’m still confused with accrued income, if we already earned that income for the period why do we need to adjust it and say profit increased ?

According to the matching concept,

Book explanation – revenue earned during an accounting period is matched in SOPL with the expense incurred in earning that revenue.

[Julia2001]

Hello,

I’m referring to the FFA text book and it says,

•An accrued expense reduces profit

•A prepayment increase profit

•Accrued income increases profit

•Prepaid income reduces profit

According to the accruals and matching concepts can you please explain,

1.why the above 4 points increases and reduces profit ?

2. does the above points refer to the current period or next accounting period ?

Thank you

[Author]

Posts