An accountant purchased a photocopier costing $5,000 for business use. The useful life of the photocopier is expected to be five years. The accounting firm has an average net income o $2,000,000 per annum. The accountant did not capitalize this expenditure as fixed asset. Give comment on this accounting practice and support your answer with reference to the mos relevant accounting concept.
An accountant purchased a photocopier costing $5,000 for business use. The useful life of the photocopier is expected to be five years. The accounting firm has an average net income o $2,000,000 per annum. The accountant did not capitalize this expenditure as fixed asset. Give comment on this accounting practice and support your answer with reference to the mos relevant accounting concept.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:An accountant purchased a photocopier costing $5,000 for business use. The useful life of the
photocopier is expected to be five years. The accounting firm has an average net income of
$2,000,000 per annum. The accountant did not capitalize this expenditure as fixed asset.
Give comment on this accounting practice and support your answer with reference to the most
relevant accounting concept.
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