Finance 2013 Sept10 Accounting(1)

Of the expense is prepaid in advance of the use of

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: ment (cap. exp.) is a long-term prepayment of an expense. of The expense is prepaid in advance of the use of The an asset, and is recorded as an asset. an As economic service life of an asset expires, the As cost of the asset is systematically allocated to operations as an expense called depreciation. depreciation Basic Concepts & Methods of Depreciation Basic Costs of three kinds of operational assets are Costs matched with revenue over the useful lives of the assets – the three related expenses are: assets 1. 2. 3. Depreciation – The accounting process of allocating periodic expiration of the cost of tangible property, plant and equipment tangible against the periodic revenue earned. against Depletion – The accounting process of allocating the periodic expiration of the cost of an asset that is a natural resource, natural such as mineral deposits and timber, against the periodic revenue earned. revenue Amortization – The accounting process of allocating the periodic expiration of the costs of intangible assets,...
View Full Document

Ask a homework question - tutors are online