RSM100Y1 Lecture 4: Feb 4,2013
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To make sure the number is correct (audit is not belong to the company) *what is the difference between the public and private firm: cost principle, revenue recognition. When will you recognize the revenue: december 22 the day you buy, december 30 the day it delivery, january 15 the day you pay for the item. Because this is the date the item changes hands: matching principle. Buy a car you pay 50000 in 5 years 10000 for each year. Ex: a company with a december 31st end has paid the following year"s rent on december31,2012. Answer: december 31,2013 the time get benefit from. Causes for differences between net income and cash flow. Cash statement: exchange of cash, you buy something will be record. Net income: also include the exchange of good and services, you buy something will not appear on income statement.
