FINANCIAL ACCT(HARDBK)+MYACCTGLAB>ICB<
FINANCIAL ACCT(HARDBK)+MYACCTGLAB>ICB<
W20 Edition
ISBN: 9780136615583
Author: REIMERS
Publisher: PEARSON C
bartleby

Concept explainers

bartleby

Videos

Textbook Question
Chapter 6, Problem 1YT

For each of the following costs, indicate whether it should be recorded as an asset or recorded as an expense at the time of the transaction:

  1. 1. Payment for employee salaries
  2. 2. Purchase of new delivery truck
  3. 3. Rent paid in advance
  4. 4. Rent paid in arrears (after use of the building)
Expert Solution & Answer
Check Mark
To determine

Classify the given costs as assets or expenses at the time of transaction.

Explanation of Solution

Assets: These are the resources owned and controlled by business and used to produce benefits for the company. Assets are classified on the balance sheet as current assets, non-current assets, property, plant, and equipment, and intangible assets.

Expenses: Expenses are costs incurred for the operations of a business. The costs incurred for generating revenues are rent expense, depreciation expense, general and administrative expenses, selling expenses, and utilities expense.

The classification of the transactions is shown below:

  1. 1. Expense – Payment of the salaries to the employees is recorded as an expense.
  2. 2. Asset – Purchase of a delivery truck is recorded as an asset.
  3. 3. Asset – Payment of rent in advance is recorded as an asset.
  4. 4. Expense – Delay in the payment or payment of the rent in arrears is an expense.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
which of the following is a revenue expenditure : a- purchase of a computer for the office  b- legal costs for the purchase of property  c- cost extension to property  d- quarterly electricity bill
All of the following is a period cost EXCEPT:     a.  Salary of an accountant.   b. Cost of a training session attended by the company's controller.     c. Insurance on a company administration building.   d. Monthly depreciation of assembly line equipment.
Which of the following is an accrued expense? a. Depreciation b. Employee's salaries c. Interest revenue d. Rental expense paid three months in advance

Chapter 6 Solutions

FINANCIAL ACCT(HARDBK)+MYACCTGLAB>ICB<

Ch. 6 - Prob. 3QCh. 6 - What does amortization mean?Ch. 6 - Prob. 5QCh. 6 - Prob. 6QCh. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - What is the residual value, or salvage value, of...Ch. 6 - What is the difference between depreciation...Ch. 6 - Prob. 11QCh. 6 - Explain the difference between the three...Ch. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Prob. 15QCh. 6 - What types of costs related to long-term...Ch. 6 - How is a gain or loss on the disposal of an asset...Ch. 6 - How does goodwill arise?Ch. 6 - Prob. 19QCh. 6 - Prob. 20QCh. 6 - Prob. 21QCh. 6 - Prob. 1MCQCh. 6 - Prob. 2MCQCh. 6 - Prob. 3MCQCh. 6 - Prob. 4MCQCh. 6 - Prob. 5MCQCh. 6 - Prob. 6MCQCh. 6 - Prob. 7MCQCh. 6 - Prob. 8MCQCh. 6 - Prob. 9MCQCh. 6 - Prob. 10MCQCh. 6 - Prob. 1SEACh. 6 - Prob. 2SEACh. 6 - Prob. 3SEACh. 6 - Prob. 4SEACh. 6 - Prob. 5SEACh. 6 - Calculate depreciation expense: double-declining...Ch. 6 - Prob. 7SEACh. 6 - Prob. 8SEACh. 6 - Mining Expedition Company purchased a coal mine on...Ch. 6 - Unique Quality Recourses purchased a patent for...Ch. 6 - Analyze revenue and capital expenditures. (LO 4)....Ch. 6 - On January 1, 2010, the Premium Beer Corporation...Ch. 6 - Prob. 13SEACh. 6 - Prob. 14SEACh. 6 - Prob. 15SEBCh. 6 - Prob. 16SEBCh. 6 - Prob. 17SEBCh. 6 - Prob. 18SEBCh. 6 - Prob. 19SEBCh. 6 - Calculate depreciation expense: double-declining...Ch. 6 - Prob. 21SEBCh. 6 - Prob. 22SEBCh. 6 - Prob. 23SEBCh. 6 - Prob. 24SEBCh. 6 - Prob. 25SEBCh. 6 - Prob. 26SEBCh. 6 - Prob. 27SEBCh. 6 - Prob. 28SEBCh. 6 - Prob. 29EACh. 6 - Prob. 30EACh. 6 - Prob. 31EACh. 6 - Prob. 32EACh. 6 - Calculate depreciation under alternative methods....Ch. 6 - Soda Pop Bottling Company bought equipment for...Ch. 6 - Prob. 35EACh. 6 - Prob. 36EACh. 6 - Prob. 37EACh. 6 - Prob. 38EACh. 6 - Prob. 39EACh. 6 - Prob. 40EACh. 6 - Prob. 41EACh. 6 - Prob. 42EACh. 6 - Prob. 43EACh. 6 - Prob. 44EACh. 6 - Prob. 45EACh. 6 - Big Peach Athletics sold assets with an original...Ch. 6 - Prob. 47EACh. 6 - Prob. 48EACh. 6 - Prob. 49EBCh. 6 - Prob. 50EBCh. 6 - Prob. 51EBCh. 6 - Prob. 52EBCh. 6 - Calculate depreciation under alternative methods....Ch. 6 - Pristine Carpet Cleaner bought a new steamer for...Ch. 6 - Prob. 55EBCh. 6 - Prob. 56EBCh. 6 - Prob. 57EBCh. 6 - Prob. 58EBCh. 6 - Prob. 59EBCh. 6 - Prob. 60EBCh. 6 - Prob. 61EBCh. 6 - Prob. 62EBCh. 6 - Prob. 63EBCh. 6 - Prob. 64EBCh. 6 - Prob. 65EBCh. 6 - Prob. 66EBCh. 6 - Prob. 67EBCh. 6 - Prob. 68EBCh. 6 - Prob. 69PACh. 6 - Prob. 70PACh. 6 - Prob. 71PACh. 6 - Prob. 72PACh. 6 - Prob. 73PACh. 6 - Prob. 74PACh. 6 - Prob. 75PACh. 6 - Prob. 76PACh. 6 - Prob. 77PACh. 6 - Prob. 78PACh. 6 - Prob. 79PBCh. 6 - Prob. 80PBCh. 6 - Prob. 81PBCh. 6 - Prob. 82PBCh. 6 - Prob. 83PBCh. 6 - Prob. 84PBCh. 6 - Prob. 85PBCh. 6 - Elite Cleaners bought a new machine on January 1,...Ch. 6 - Prob. 87PBCh. 6 - Prob. 88PBCh. 6 - Prob. 1FSACh. 6 - Prob. 2FSACh. 6 - Prob. 1CTPCh. 6 - Prob. 2CTPCh. 6 - Prob. 3CTPCh. 6 - Prob. 1IECh. 6 - Prob. 2IECh. 6 - Prob. 3IE
Knowledge Booster
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • Indicate (by choosing the appropriate letter) whether each of the following would be reported in the section of financial statements identified as: (a) current asset, (b) property, plant, and equipment, (c) current liability, (d) revenue, (e) expense, or (f) long-term liabilities.  (An item may be used multiple times)   (1) ____ Accumulated depreciation-Truck  (2) ____ Rent expense  (3) ____ Fees earned  (4) ____ Salaries payable  (5) ____ Prepaid rent   (6) ____ Store supplies   (7) ____ Advertising expense   (8) ____ Unearned rent   (9) ____ Note payable (all of it is due in 2025)   (10) ____ Truck
    The adjusting entry to record the depreciation of a building for the fiscal period is a.debit Accumulated Depreciation; credit Depreciation Expense. b.debit Depreciation Expense; credit Accumulated Depreciation. c.debit Building; credit Depreciation Expense. d.debit Depreciation Expense; credit Building.
    Explain how you would decide whether to record each of the following expenditures as an asset or an expense.Assume all items are material.(a) Legal fees paid in connection with the purchase of land are $1,500.(b) Eduardo, Inc. paves the driveway leading to the office building at a cost of $21,000.(c) A meat market purchases a meat-grinding machine at a cost of $3,500.(d) On June 30, Monroe and Meno, medical doctors, pay 6 months’ office rent to cover the month of July and the next5 months.(e) Smith’s Hardware Company pays $9,000 in wages to laborers for construction on a building to be used in the business.(f) Alvarez’s Florists pays wages of $2,100 for the month to an employee who serves as driver of their delivery truck.
    • SEE MORE QUESTIONS
    Recommended textbooks for you
  • College Accounting (Book Only): A Career Approach
    Accounting
    ISBN:9781337280570
    Author:Scott, Cathy J.
    Publisher:South-Western College Pub
    Principles of Accounting Volume 1
    Accounting
    ISBN:9781947172685
    Author:OpenStax
    Publisher:OpenStax College
    Financial Accounting
    Accounting
    ISBN:9781337272124
    Author:Carl Warren, James M. Reeve, Jonathan Duchac
    Publisher:Cengage Learning
  • Financial Accounting Intro Concepts Meth/Uses
    Finance
    ISBN:9781285595047
    Author:Weil
    Publisher:Cengage
  • College Accounting (Book Only): A Career Approach
    Accounting
    ISBN:9781337280570
    Author:Scott, Cathy J.
    Publisher:South-Western College Pub
    Principles of Accounting Volume 1
    Accounting
    ISBN:9781947172685
    Author:OpenStax
    Publisher:OpenStax College
    Financial Accounting
    Accounting
    ISBN:9781337272124
    Author:Carl Warren, James M. Reeve, Jonathan Duchac
    Publisher:Cengage Learning
    Financial Accounting Intro Concepts Meth/Uses
    Finance
    ISBN:9781285595047
    Author:Weil
    Publisher:Cengage
    What is Cost Allocation? Definition & Process; Author: FloQast;https://www.youtube.com/watch?v=hLhvvHvZ3JM;License: Standard Youtube License