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lwpat, Attorney
Category: Business Law
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Experience:  Attorney with over 35 years of business experience.
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Understand Accoutning Do raw materials purchased in 2009

Resolved Question:

Understand Accoutning?

Do raw materials purchased in 2009 affect income for 2009?
Do they affect expenses for 2009?
Would the monies paid for purchases affect employee bonuses for 2009?
Submitted: 7 years ago.
Category: Business Law
Expert:  lwpat replied 7 years ago.
Materials purchased in 2009 are a deduction from income since they are expenses so the answer to the first two questions is yes. As to employee bonuses that is a company policy and not an accounting issue. For example a company may decide to reduce its income for 2009 by purchasing more raw materials at the end of the year. However, it would eventually work out the next year. This is all assuming a cash basis.
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