Question
Nisa company in UK, where the tax system gives capital allowance (money deducted from the overall income tax). The tax year runs from 10th of
Nisa company in UK, where the tax system gives capital allowance (money deducted from the overall income tax). The tax year runs from 10th of April to 9th of April. The financial year of the company end was 30 of June. Tom is farmer and want to buy machine in March and wanted the machinery invoiced in in March, but would pay in August when the machine will be delivered. A. Why do you think Tom wished to do this? B. The manager of Nisa company accepted and decided to send the bill to the farmer Tom and record the transaction as revenue as soon as the bill has been sent. Why do you think the manager accept and decided to do revenue recognition in the way that he decided to do? Is there profit management here? explain your answer and show if there advantage and disadvantage of managers decision.
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