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General Accounting Discussions: Can some one kindly distinguish between cost and expense? and is it all cost are expense

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    • CommentAuthorjaiteh
    • CommentTimeFeb 16th 2008
     
    Eg. A business acquired fixed asset at the cost of $50000.
    Thankful People: abdulbarisdq
    • CommentAuthorjake
    • CommentTimeJun 18th 2008
     
    Dr Fixed Assets
    Cr Cash or Note Payable

    Set up on your Depreciation Schedule and record Depreciation Expense monthly or annually.

    Dr Depreciation Expense
    Cr Accumulated Depreciation
    • CommentAuthorHaroldt
    • CommentTimeJun 18th 2008 edited
     
    A cost is a value attached to an item, usually it is the purchase price of the item where as an expense, according to IAS1, is the decrease in future economic benefits of an entity, as a result of past events, due increases in outflow of funds, depletion of assets and incurrence of liabilities, that will result in decreases in equity, other than distributions to shareholders of the parent.
    Eg purchase of machinery for $1000, this value can be attributed to cost rather than an expense.

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