bumidan on 27 November 2008
twroo
generally accepted accounting principles...
generally in accounting - you match the revenue and expenses..
gaming example.
if i was a game store and you "pre buy" a game for $50 from my store (that is not released yet, and therefore I don't have it in stock) - to be delivered 6 months later
then if I am a public company and I have to report this transaction
then it is NOT revenue
because GENERALLY revenue should match with the expense
therefore, i would have to report this REVENUE 6 months later
even though I already got your $50
(the cash of $50 will appear in my assets though so everything is still accounted for and i will have a $50 liability - bec i owe you $50 of product)
con't..
