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Does recording utilities etc for a home business on taxes violate the matching principle?
I recently started doing my own accounting, and while im not a cpa yet, I still have some understanding of accounting. Should I prorate my utility usage throughout the year to stay in line with the matching principle of accounting or should I only record these expenses at the end of the year when I do my taxes?
2 Answers
- ?Lv 55 years agoFavorite Answer
I never include home office expense on financial statements because the bank doesn't consider it an actual expense. You can drive yourself nuts trying to keep books for a home based business following all the formal accounting principles. There's really no reason to do it. I record home office expense and depreciation as a year-end adjustment.
- ProfLv 75 years ago
It would be a waste of your time. Assuming you allocate 20% of your utilities to the business, whether you do it monthly or at the end of the year, the result is the same.
