Question

An expense is recognized immediately when

a. An expenditure produces no future economic benefit
b. Cost incurred ceases to qualify as an asset
c. An expenditure produces future economic benefit
d. An expenditure produces no future economic benefit and when cost incurred ceases to qualify as an asset

Answer 1

An expense is recognized immediately when an expenditure produces no future economic benefit or when the cost incurred ceases to qualify as an asset.

Step-by-step explanation:

An expense is recognized immediately when:

An expenditure produces no future economic benefit. For example, buying office supplies that will be used up and will not contribute to future revenue.

The cost incurred ceases to qualify as an asset. This can happen when an asset is damaged or rendered obsolete, and its value cannot be recovered.

In both cases, the expense is recognized immediately because it does not generate future economic benefits or contribute to the company's assets.