Asset: An asset means a possession of property tangible or intangible which has some value; such that it can be realized in monetary terms and such asset can be liquidated in short-term or long-term approach so as to derive its value in cash. Current Assets: A current asset can be as the asset of any entity that is in the form of cash, cash equivalent or in a form which can be converted into cash within a year. Generally the current are defined to be the ones which can be liquidated within a year but if the company's operating cycle exceeds one year even though the assets are regarded as current assets until they get converted into cash ultimately as the last stage of operating cycle. Long-Term Assets: Long-term assets are the assets possessed by the company which cannot be liquidated before one year. The minimum maturity period for the said assets is one year. These assets are being recorded in the books at the purchase price and are adjusted by the depreciation that takes place due to its use over a period of time, impairment expenses. Also, long term asset of any entity includes its buildings, machineries, fixed assets and long term investments. To determine: The accounting concept that justifies charging low cost plant asset purchases immediately to an expense account.

Question

Want to see the full answer?

Answer 1

Question

Chapter 10, Problem 7DQ

To determine

Asset:

An asset means a possession of property tangible or intangible which has some value; such that it can be realized in monetary terms and such asset can be liquidated in short-term or long-term approach so as to derive its value in cash.

Current Assets:

A current asset can be as the asset of any entity that is in the form of cash, cash equivalent or in a form which can be converted into cash within a year. Generally the current are defined to be the ones which can be liquidated within a year but if the company's operating cycle exceeds one year even though the assets are regarded as current assets until they get converted into cash ultimately as the last stage of operating cycle.

Long-Term Assets:

Long-term assets are the assets possessed by the company which cannot be liquidated before one year. The minimum maturity period for the said assets is one year. These assets are being recorded in the books at the purchase price and are adjusted by the depreciation that takes place due to its use over a period of time, impairment expenses. Also, long term asset of any entity includes its buildings, machineries, fixed assets and long term investments.

To determine: The accounting concept that justifies charging low cost plant asset purchases immediately to an expense account.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Horngren's Financial & Managerial Accounting: The Managerial Chapters, 8th Edition. E-M:9-14 Describing the balanced scorecard and identifying key performance indicators for each perspectiveConsider the following key performance indicators and classify each indicator according to the balanced scorecard perspective it addresses. Choose from the financial perspective, customer perspective, internal business perspective, and the learning and growth perspective. a.Number of customer complaintsb.Number of information system upgrades completedc.Residual incomed.New product development timee.Employee turnover ratef.Percentage of products with online help manualsg.Customer retentionh.Percentage of compensation based on performancei.Percentage of orders filled each weekj.Gross margin growthk.Number of new patentsl.Employee satisfaction ratingsm.Manufacturing cycle time (average length of production process)n.Earnings growtho.Average machine setup timep.Number of new customersq.Employee…

Do fast answer of this general accounting question

Please provide the solution to this general accounting question with accurate accounting calculations.