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Accordingly, they are charged as expenses in the income statement of the accounting period in which the salaries are paid. The matching principle, then, requires that expenses should be matched to the revenues of the appropriate accounting period and not the other way around. Sometimes, expenditures are incurred either in advance or subsequent to the […]

However, rather than the entire Capex amount being expensed at once, the $10 million depreciation expense appears on the income statement across the useful life assumption of 10 years. In contrast, cash-basis accounting would record the expense once the cash changes hands between the parties involved in the transaction. For instance, the direct cost of […]

How you pay yourself depends on how your business is structured, so talk to your accountant or do some research into taking a salary versus a draw. We update our data regularly, but information can change between updates. Confirm details with the provider you’re interested in before making a decision. This website is using a […]