Distinguish between the concepts of expense and asset.Support your answer by using an example to demonstrate the difference.
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Distinguish between the concepts of expense and asset.Support your answer by using an example to demonstrate the difference.
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- Read each definition below and write the number of the definition in the blank beside the appropriate term. The quiz solutions appear at the end of the chapter. Understandability Relevance Faithful representation Comparability Depreciation Consistency Materiality Conservatism Operating cycle Current asset Current liability Liquidity Working capital Current ratio Single-step income statement Multiple-step income statement Gross profit Profit margin Auditors report An income statement in which all expenses are added together and subtracted from all revenues. The magnitude of an accounting information omission or misstatement that will affect the judgment of someone relying on the information. The capacity of information to make a difference in a decision. An income statement that shows classifications of revenues and expenses as well as important subtotals. The practice of using the least optimistic estimate when two estimates of amounts are about equally likely. The quality of accounting information that makes it comprehensible to those willing to spend the necessary time. Current assets divided by current liabilities. The quality of information that makes it complete, neutral, and free from error. An obligation that will be satisfied within the next operating cycle or within one year if the cycle is shorter than one year. Current assets minus current liabilities. Net income divided by sales. For accounting information, the quality that allows a user to analyze two or more companies and look for similarities and differences. An asset that is expected to be realized in cash or sold or consumed during the operating cycle or within one year if the cycle is shorter than one year. The ability of a company to pay its debts as they come due. For accounting information, the quality that allows a user to compare two or more accounting periods for a single company. The process of allocating the cost of a long-term tangible asset over its useful life. The period of time between the purchase of inventory and the collection of any receivable from the sale of the inventory. Sales less cost of goods sold. The opinion rendered by a public accounting firm concerning the fairness of the presentation of the financial statements.Please explain formula to get total for each expenseExpense recognition is implemented by one of four different approaches, depending on the nature of the specific expense. Describe about the approaches.
- Please explain why 2 should be multiply for the rent expense to get the final answer.Respond to the following in a minimum of 175 words: Explain why proponents of LIFO argue that is provides a better match of revenue and expenses. In what situation would it not provide a better match?Which statement below best describes when to record an expense? When the expense is paid. When the resource is consumed or a benefit is derived. Always taken in one period only. Never is recognized before revenue is recognized.
- Please prepare a cost by nature/expense by nature income statement for the following points. In particular please explain whether point a) (first point) should be included in the income statement. In point a), Is there sufficient information for write-off expenses to be recorded in the income statement and should write-off of assets be included in the income statement? a) Write off (in minus) of short-term financial assets 9 000b) Other costs by nature 4 000c) Change in inventories of traded goods + 2 000d) Revenue from sale of building 50 000e) Income tax 10%f) Revenue from sale of traded goods 12 000g) Retained profits from previous years 10 000h) Accumulated depreciation of building 49 000i) Historical cost of building 102 000Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.)1. How do we decide whether to capitalize (record as an asset) or expense a particular cost? 2. Provide one example of each to capitalize (record as an asset) or expense a particular cost.
- You have established your performance materiality for accounts payable and revenue; now you must determine the posting materiality for individual items. The materiality judgement is at 4%. What is the posting materiality? Show your work. Your work should look like: APPROPRIATE AMOUNT x MATERIALITY JUDGEMENT = POSTING MATERIALITYWhat are the four different approaches to implementing expense recognition? Give an example of an expense that is recognized under each approach.Consider the following accounts and identify each account as an Asset(A), Liability(L), or Equity(E). Thanks! taxes payable Rent Expesnes Furniture Nunez,Withdrwal Unearned revenue