Expense Recognition Question: How do you indicate the amount of expense that should be recognized for each of the following events of a company, that occurred during the year of 2018? 1. Space was leased from another company for a one-year period, starting November 1, 2018. Five months of rent at $2,340 per month was paid in advance. 2. Incurred $27,350 of research costs for new products. Although no new items have been created, management is certain that the research will result in new products. 3. The business used electricity and water during December for manufacturing, the company will receive the bill in January 2019 and pay it in February 2019. Electricity and water costs totalling $45,375 have been recorded for the period from January 1 to November 30, 2018. Please Explain.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Expense Recognition

Question: How do you indicate the amount of expense that should be recognized for each of the following events of a company, that occurred during the year of 2018?

1. Space was leased from another company for a one-year period, starting November 1, 2018. Five months of rent at $2,340 per month was paid in advance.

2. Incurred $27,350 of research costs for new products. Although no new items have been created, management is certain that the research will result in new products.

3. The business used electricity and water during December for manufacturing, the company will receive the bill in January 2019 and pay it in February 2019. Electricity and water costs totalling $45,375 have been recorded for the period from January 1 to November 30, 2018.

Please Explain.

 

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