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expired cost - benefit has been received unexpired cost- benefit may or may not be received
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What is the difference between expired cost and unexpired cost?
expired cost - benefit has been received unexpired cost- benefit may or may not be received
What is the meaning of entries to apportion recorded cost?
Apportioning cost means dividing cost between Expired cost (depreciated value) and Unexpired cost (not depreciated yet). Cost which is used or whose time period is over is expired cost which can also be called as expense now, while unexpired cost can be named as remaining book value. For example, Prepaid rent was paid in September for the coming 4 months was $4000. Now, at the end of September the expired cost will be $1000 (and will be recorded in income statement as expense) and Unexpired cost will be $3000 (& will be recorded in Balance sheet as an asset ). Entry at the start of September would bePrepaid Rent a/c $4000 (Dr)Cash a/c $4000 (Cr) Entry at the end of September would be Rent a/c $1000 (Dr)Prepaid Rent a/c $1000 (Cr)See here, the used up cost or you may say asset has been turned into an expense, mitigating the value of Prepaid rent with $1000. Suppose you are preparing Balance Bheet at the end of September, the $1000 will be recorded in Income Statement as an expense while the Remaining $3000 will be recorded as current asset in Balance Sheet.
What is the difference between cost and expense?
The difference between a cost and an expense lies on the matter of distinguishing and separately recognizing the used, utilized and expired portion of the cost, being that part is what we called an expense. An expense can also be described as a cost forgone since it is already been utilized and used. The expense is also recognized only in the income statement rather than in the balance sheet since utilization is recognized for a certain period of time. On the other hand, an unused or an unexpired cost is reported in the balance sheet as at a certain point of time. A costmight be an expense or it might be an asset. An expense is a cost that has expired or was necessary in order to earn revenues.
Is inventory an example of expired cost?
yes
Variable costs are irrelevant whenever they do not differ among the alternatives at hand. do you agree?
Any cost whether variable cost or fixed cost is irrelevant if not different between alternatives at hand.
