Close books trashes Income Statement and Net Income on Balance Sheet
warlord at MIT.EDU
Wed Feb 10 10:47:15 EST 2010
JT Morée <moreejt at yahoo.com> writes:
> --- On Mon, 2/8/10, Derek Atkins <warlord at MIT.EDU> wrote:
>> If you perform Cash
>> based accounting then you need to apply your Income and
>> Expense when the
>> payment happens, not when you book the invoice/bill.
>> So in this case
>> the invoice/bill txn does NOT apply to the period in which
>> it is dated.
> I don't see how having a fake/unique/reserved date fixes that problem. If someone puts invoices in the books on a cash system when sending them there will be skewed data no matter what date it's on.
The fake date is required for the zeroizing transactions... No, it
doesn't help converting from accrual based accounting (invoices/bills)
to cash-based accounting, but that's not its purpose here.
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Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
Member, MIT Student Information Processing Board (SIPB)
URL: http://web.mit.edu/warlord/ PP-ASEL-IA N1NWH
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