Which one of the following is not a recognized method of recognizing assets as expenses in...

Which one of the following is not a recognized method of recognizing assets as expenses in a particular accounting period?

Customers’ account balances in accounts receivable are assigned to expense in the period in which each customer pays.

Prepaid insurance is assigned to expense as the insurance expires.

A building is depreciated and its cost is assigned to the current and future accounting periods in which the building is expected to be used.

Merchandise inventory is assigned to cost of goods sold in the period the goods are sold.

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Expert Solution

A.Customer's account balances in accounts receivable are assigned to expense in the period in which each customer pays.

The above is not a recognised method of reocognising assets as expenses.

Whenever a customer pays, the accounts receivable is written by the amount paid by the customer, expensing of accounts receivable is done every year in form of an estimate i.e allowance for bad and doubtful debts, but there are many methods to write off the same.

Rest all the options such as expensing prepaid insurances , expensing buildings through depreciation, assigning inventory as cost of goods sold are correct methods.

jeff jeffy answered 2 years ago

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