CNCT ACC CORPORATE FINANCE
CNCT ACC CORPORATE FINANCE
12th Edition
ISBN: 9781264604081
Author: Ross
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 2, Problem 2CQ
Summary Introduction

To discuss: The reason why the costs and revenues listed in the income statement does not represent the actual cash inflows and outflows of the company

Introduction:

Generally Accepted Accounting Principles (GAAP) requires a company to follow certain principles while preparing the books of accounts. One among the principles is the matching principle and recognition principle.

This principle states that the company should recognize the revenue when there is a virtual completion of the earning process and when the company is able to determine the exchange value of goods and services.

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