Capital expenditureis an outlay of money by a company for an asset that will provide future economic benefits. These assets can be tangible, such as buildings, land, or equipment, or intangible, such as patents
Expenditure– This is the total purchase price of a good or service. For example, a company buys a $10 million piece of equipment that it estimates to have a useful life of 5 years. This would be classified as a $10 million capital expenditure. Expense– This is the amount that is rec...
In order for an asset to be classified as a current asset, it has to be used up or turned into cash (a.k.a. converted) within one fiscal year. Current assets include cash and cash equivalents. Other current assets include marketable securities (like stocks and bonds), accounts receivable...
Based on normality, costs may be classified as: Normal or unavoidable costs Abnormal or avoidable costs Normal or unavoidable costs are normally incurred at a given level of output under the conditions for which that level of output is normally attained. Costs of this kind cannot be avoided at...
Accounting rules may dictate whether an item is classified as CapEx or OpEx. For example, if a company chooses toleasea piece of equipment instead of purchasing it as a capital expenditure, the lease cost would likely be classified as an operating expense. If a company purchased the ...
Capital Expendituresuch as buying machinery and equipment A major issue in accounting is whether specific expenditures should be classified as expenses – which one is reported straight away on the company’s income statement – or a capital expenditure, or a cost that is subject to depreciation, ...
It’s classified as a tier one asset in the global banking system, under modern banking regulations. Thus, although government-issued currency is no longer backed by a certain amount of gold, it remains an indirect and important piece of the global monetary system as a reserve asset. There ...
Learn about the types of cloud computing technology and how it transforms businesses with scalable, on-demand computing resources.
Businesses earn money from a variety of sources, including those that do not require a business transaction, such as interest earned or a lawsuit award. Depending on the type of transaction, revenue is classified as operating or non-operating revenue. Operating Revenue Operating revenue comes ...
What is classified as a prepaid expense account? Answer and Explanation: Prepaid expenses are expenses that have been paid in advance yet will be used as an expense in the future. It is simply an expense that has already... Learn more about this topic: ...