A few days ago
Katie89

how to find the expenses/total assets in an accounting problem?

How do i find the expenses and total assets of an accounting problem?

Top 1 Answers
A few days ago
Patrick P

Favorite Answer

You’ve got to analyze the nature of the expenditure.

Revenue expenditures are those that will provide economic benefits only for the period when the expenditure was made.

Examples:

Rent of office space; Selling costs, salaries, interest payments

Capital expenditures are those that will provide economic benefits for more than one period.

Examples:

Acquistion of land, building, and other equipment, goodwill, or long-term investments

The tricky part I think is when it comes tor epairs and maintenance. The nature of the expenditure should be analyzed whether it extends the life of the asset or increases its quality long-term. In those cases, it should be classified as asset.

Try to browse at intrmediate accounting books. It is explained in more detail there.

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