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发布时间：2006-06-26 22:28     点击：

Expense

They are the cost of purchasing goods or services used in running the business , resulting in decrease in assets or increase in liabilities.

Accrual accounting and cash base accounting

1. In accrual accounting ,revenues are recorded in the period in which goods or services are provided, regardless of when cash is received. The revenues and expenses of the same period are matched so that the company’s profit can be determined.

2. Under the cash basis accounting system, net profit is the difference between cash receipt from operations and cash payments made during the accounting period. It may distort the net profit.

Depreciation

1. Provision for depreciation is the process of allocation of the cost of a

physical asset to each accounting period in which the asset is used.

2. Depreciation represents the portion consumed during the accounting

period.

3. When depreciation expense is debited, the provision for depreciation is credited.

4. Provision for depreciation represents the total depreciation expenses recorded since the asset was purchased.

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