1.

if a firm taken into acccount advance received from a customer as income it violates which of the income concept?

Answer»

Matching of income and expense. Taking the advance into a trust ACCOUNT and drawing on the deposit as expenses are incurred keeps the picture CORRECT. MONEY deposited in a trust account is not taxable income until it is withdrawn for deposited in the regular business account. This is generally directed at CASH basis accounting as opposed to Accrual accounting.



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