At the directors meeting of Mistletoe plc at which the draft accounts for the year ended 30 September 20x3 were discussed, the marketing director made the following comment:

The cost of the recent expenditure on the mailshot and television campaign advertising our products for Christmas 20x3 will benefit profits in the year ended 30 September 20x4. I cannot understand why this has all been treated as an expense in the 20x3 accounts.

Evaluate this comment, making reference to any accounting concepts and principles which seem appropriate.

 

Answer rating: 100% (QA)

Evaluation of the Marketing Directors Comment The marketing directors comment raises a valid point about matching principle and accrual accounting Let... View the full answer