Cost of Sales and Other Expenses Notes

21/02/2024, 09:27 Cost of Sales and Other Expenses https://www.remnote.com/w/64b8840a57ffd072dbf419a5/Cost-of-Sales-and-Other-Expenses-SLJbI5oHc1lJOLkqe 1/2 Secondary 4 Principles of Accounts Share Cost of Sales and Other Expenses Theories: Matching theory The costs incurred must be matched against the profit earned in the same accounting period to determine profit for the period. Matching theory The costs incurred must be matched against the income earned to determine the profit for that period Expenses Payable refer to expenses incurred in the accounting period, but have not been paid for. Prepaid expenses refer to expenses that have been paid early. Journal entries to account for expenses Businesses produce financial statements that can summarise a company's performance over a period, usually a year, They are: Prepaid expense or Expense Payable (this is at the beginning of the period) Cash at bank (in hand) or Other payable (if item was bought on credit) Income summary (profit and loss section - this is for calculating the expense) Prepaid expense or Expense payable (this is at the end of the period) Adjustments TableFilter Sort Un-hide by clicking the property's name from the "Table" menu. 👆 Property 1 Property 2 Profit for the year Current Asset Understated Understated ense

21/02/2024, 09:27 Cost of Sales and Other Expenses https://www.remnote.com/w/64b8840a57ffd072dbf419a5/Cost-of-Sales-and-Other-Expenses-SLJbI5oHc1lJOLkqe 2/2 Type/for options Overstated able