Sometimes the value spent by a corporation is recorded as an asset and sometimes as an expense. Find appropriate professional research to answer the following: Define the two terms. How and why are these expenditures different from each other? How are they different from Liabilities? Describe the effects of assets and expenses on the company’s financial statements. In ACC1001 you studied about Current Assets. How do they affect the financial statements differently from fixed assets? Comment on the statement that “all assets are eventually expenses”

Sometimes the value spent by a corporation is recorded as an asset and sometimes as an expense. Find appropriate professional research to answer the following: Define the two terms. How and why are these expenditures different from each other? How are they different from Liabilities? Describe the effects of assets and expenses on the company’s financial statements. In ACC1001 you studied about Current Assets. How do they affect the financial statements differently from fixed assets? Comment on the statement that “all assets are eventually expenses”

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Description: Sometimes the value spent by a corporation is recorded as an asset and sometimes as an expense. Find appropriate professional research to answer the following:Define the two terms. How and why are these expenditures different from each other?How are

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter4: The Balance Sheet And The Statement Of Shareholders' Equity

Section: Chapter Questions

Problem 1RE

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Sometimes the value spent by a corporation is recorded as an asset and sometimes as an expense. Answer the following: • Define the two terms. How and why are these expenditures different from each other? • How are they different from Liabilities? •Describe the effects of assets and expenses on the company's financial statements. • About Current Assets. How do they affect the financial statements differently from fixed assets? • Comment on the statement that "all assets are eventually expenses"
Present an argument to support the idea that your company’s land should not be depreciated, even though the property on the land is depreciated? Using practical example describe how International Accounting Standard 40 would apply to Assets in your company? Depreciation does not involve movement of cash, therefore unnecessary in accounting for an entity’s performance, Discuss?
Which of the following is NOT correct regarding the rate of return on assets? a. The rate of return on assets measures management’s ability to productively employ all its resources. b. The rate of return on assets measures the return on all assets used regardless of how the assets are financed. c. The rate of return on assets is a measure of profitability. d. The rate of return on assets measures the return on the investment made by the owners of the entity. is B the correct answer?
Why Do Capital Expenditures Increase An Organization's Assets ,While Other Expenditures, Like Paying Taxes, Employee Salaries, Utility Bills, Etc. Do Not Increase An Organization's Asset Base, But Instead Show Up As Expenses On The Income Statement That Reduce Equity Via Retained Earnings?
As per IAS 16: PPE, how would you recognize your company’s assets that were acquired with the intention of generating Revenue? Explain how you would treat debtors of business?
Answer the following questions in depth .... Why do accountants have to classify items as capital or revenue expenditures? Why do you treat exchanges of similar and dissimilar assets differently? Aren't they all exchanges? Is it true that the higher the depreciation, the lower the net income? If that is the case, why would we not want the lowest depreciation method so we can show the highest net income? Why do we have various methods of depreciation? Isn't that encouraging misleading results?
Which of the following statements about financial statements is incorrect? They are the primary responsibility of the management of the They show the results of the stewardship of the management for the resources entrusted to it by the capital They are prepared at least annually and are directed to both the common and specific information needs of a wide range of statement The provide information about the financial position, performance and cash flows of an enterprise that is useful to a wide range of users in making economic
Which of the following would not explain the difference between current and non-current assets? A.The future benefit of current assets will generally be used up within the entity's operating cycle B.An expenditure is classified as a non-current asset if it is considered to be material C.The nature and intention of the business can help determine whether an expenditure should be classified as a non-current asset D.An asset is classified as non-current if it is intended to be used within the business for a considerable period of time
The International Accounting Standards Board’s Conceptual Framework for Financial Reporting defines an asset as:A A resource controlled by an entity which is capable of generating independent cash flows.B A resource capable of generating income for the entityC A resource owned by an entity as a result of a past events, from which future economic benefits are expected.D A resource controlled by an entity as a result of past events, from which future economic benefits are expected.
Depreciation is considered as accounting policy and operational expense for the accounting period. The value to be included in the financial statement is calculated based on the decision of the Board. (a) You are required to: (i) Explain the difference between capital expenditure and revenue expenditure, and how each type of expenditure will affect the financial statements of a business. (ii) Explain why it is important to distinguish between capital expenditure and revenue expenditure, and briefly explain the accounting treatment of each type of expenditure. (iii) Under what circumstances will you consider the reducing balance method as the most appropriate method in calculating depreciation? (b) Does depreciation decrease cash in a business? Explain your answer.
According to the textbook, the definition of asset is "asset are resources that are controlled by a business from which the economic benefits are expected to flow to the business.", the definition of liabilities are "they represents negative future cash flow for the enterprise."But asset included liabilities, isn' t that contradict the definition of asset?
Which of the following statements are TRUE? a. The reason for including a treatment of depreciation in this book is to allow you to develop a reasonably accurate report to the owners of a business regarding its value at any given point in time. b. Depreciation spreads investment costs over the useful life of equipment purchased. c. Depreciation allowances can be treated as expenses because they are cash flows. d. Depreciation affects income taxes, which are cash flows.