APT Initiatives
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Established in 1999

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Accrual (or matching) principle

Requires costs to be matched to the revenues they generate. Thus, all sales, including those on credit should be recorded when the sale has been made ie at the time the goods / services have been received by the customer (buyer), rather than when the actual payment (cash) has been received by the supplier (seller). The same principle applies to costs and so in the case of the purchase of an asset used repeatedly over time, the cost should be depreciated over the useful life of the asset, rather than the entire cost being charged against profit at the time the asset is purchased.

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