> Date: Mon, 15 Sep 2003 09:36:01 +0100 > From: "Rob Brigham" <[EMAIL PROTECTED]> > To: <[EMAIL PROTECTED]> > Subject: RE: pentax-discuss-d Digest V03 #984 > Message-ID: <[EMAIL PROTECTED]> > Content-Type: text/plain; > charset="US-ASCII" > Content-Class: urn:content-classes:message > Content-Transfer-Encoding: 8bit > > OK, I'm gonna back out of this one too! Sorry Bob - had a migraine > after a day of the kids pestering me and couldn't think as clearly as > perhaps I should. Headache still there, but thinking a 'little' more > clearly now... > > However, from a tax point of view the invoice is raised prior to or when > goods are despatched in any accounting system I have ever worked on, not > when money is actually collected, and certainly not when the customer > receives the goods. > > I'm gonna have to leave this one for now because work is pressing and I > have yet another mad week which means I wont have time to continue the > discussion. > > This is totally dependent upon the type of accounting you are doing. Apparently, all the accounting systems you've worked with use Accrual Accounting. Accrual Accounting enables you to book (account for) income when you think you should have received it (not necessarily when you did receive it).
There is a whole other world called Cash Accounting. Cash Accounting requires that you book the income when you receive the money. I'm not an accountant (and I haven't played one on the tele), but I have created lots of accounting systems for large financial services firms. In the US, insurance companies are mandated to use Cash Accounting. In other countries, they may use Accrual Accounting. The fun part comes when you put them together on the same balance sheet. Larry in Dallas (who still has his very old Arthur Andersen ID, from when the firm required that I read a multi-hundred page book on ethics and sign an oath that I would abide by it, as well as actually resigned audits of firms that it thought were not up to their standard. Times they do change.)
