Suppose the fixed asset is a machine, which will be used to produce goods, which will be sold at a profit. The sales will be recorded as the products are sold during the economic lifetime. Hence, the purchase price of the fixed asset needs to be allocated (spread) over the economic lifetime as well. The expense is called depreciation expense.
As per IAS 16: If purchase of component of fixed asset is major part of original asset or purchase of component increase the effectiveness or live of asset then it is treated as a part of original price and treated as asset. If purchase of component is routine purchase for small repair etc then it is treated as revenue expense.
purchase return is assets or liability or expense
An asset will have benefits extending into the next accounting period
deferred nexpense
Depreciation expense is neither an asset or liability. It is an expense.
preliminary expense is the expense for fitting the asset or similar works, so this expenses capitalized.... and is called fixed asset
Depreciation should be treated as expense because the worth of the asset like machinery and building goes down as time goes by. This reduction in the amount cannot be collected by anyone and cannot be claimed. The company only has to bear this amount. Because of this depreciation is treated as an expense.
Yes, any expense paid in advance is current asset as the actual benefit will be taken in future time period.
Expense
An expense is not an asset at all.
Supplies expense is neither an asset nor a liability it is an expense. Prepaid supplies would be an example of an asset and as the supplies are used they become expenses, supplies expense.
the asset method = record all purchases as asset then recognize expense (diff of beg bal & end bal) dr. prepaid supply (purchase) cr. cash expense method = record all purchases as expense, then account for the ending balance. adjust beg balance to reflect end balance. dr. supply expense cr. cash