A cost can be an asset or expense depending on whether the future economic benefits have expired or not.

Question

Quizplus · Accepted Answer

A cost is considered an asset as long as the future economic benefits have not yet expired or been consumed. Once the benefits have been consumed, the cost becomes an expense. This is in accordance with the accrual accounting principle, where expenses are recognized when incurred and assets are recognized as long as economic benefits are expected to arise from them.

A Cost Can Be an Asset or Expense Depending on Whether