The adjusting entry at the end of the period to record an expired cost may be different depending on whether the cost was initially recorded as an asset or an expense.

Question

Quizplus · Accepted Answer

If the cost was initially recorded as an asset, the adjusting entry will involve debiting an expense account and crediting the asset account to reflect the expiration of the cost. If the cost was initially recorded as an expense, the adjusting entry will simply involve crediting the expense account to reflect the full recognition of the cost in the current period.

The Adjusting Entry at the End of the Period to Record