Timing issues

• Overall


  When revenues and expenses are recorded. Should use the ‘matching principle’ to record this

  Businesses can make adjustments to the timing of activities to make their profits appear higher or their costs seem lower

  For example, a business may sell all of their equipment and purchase new equipment in the same financial year. They might record the sale of the old equipment in the current financial year, but then record the new equipment purchases in the following year. This would make their revenue seen much higher and their expenses seem much lower in the current financial year