The adjusting entry at the end of a 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 moving the cost from the asset account to an expense account, while if it was initially recorded as an expense, the adjusting entry will simply involve recording the expense as fully expired.

The Adjusting Entry at the End of a Period to Record