Question
$3.00 Is the purchase of equipment treated as an expense at the time of purchase? Why or why not?
Found in Education: General-EducationChapter 1, # 1
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volcanblack
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Rating (59):C-
Questions Asked: 3
Tutorials Posted: 761,
Blog Posts: 1,
Earned: $7,957.43
Q:
Is the purchase of equipment treated as an expense at the time of purchase? Why or why not?
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No, GAAP requires that 10% of the cost be expensed each year. This minimizes attempts to mislead financial statement users. |
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Yes, the matching principle requires that the cost be expensed in the period of purchase. |
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No, the cost needs to be allocated to the years of expected use. |
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Yes, the actual life of the asset is not known, thus there is no acceptable way to allocate the cost. |
$3.00
Is the purchase of equipment treated as an expense at the time of purchase? Why or why not?
- This tutorial was purchased 3 times and rated No Rating by students like you.
- Posted on Jan. 23, 2012 at 02:09:20AM
A:
Preview: ... ed in the period of purchase.
No, the cost needs to be allocated to the years of expected use.
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The full tutorial is about 82 words long .