Final answer:
The costs that are reclassified as expenses after being used, except for short-term investments, include inventory, prepaid insurance, and prepaid rent. Short-term investments remain as assets. It's important to understand the various types of costs in financial management, which include explicit, implicit, fixed, and variable costs.
Step-by-step explanation:
The costs that are initially expressed as assets but then reclassified as expenses once they are used up include inventory, prepaid insurance, and prepaid rent. These costs are typically considered to be current assets on the balance sheet and are expensed over time as they are 'consumed' by the business. However, short-term investments are not an expense but rather an asset that a company plans to convert back into cash within a short period, typically within a year. Therefore, they are not reclassified in the same way as the consumed costs are.
Understanding the difference between explicit costs, which are out-of-pocket, and implicit costs, which represent the opportunity costs of using resources a firm already owns, is crucial in accounting and financial management. This knowledge helps in calculating both the explicit costs such as salaries and rent, as well as implicit costs like depreciation and the cost of utilizing owner-contributed resources. Additionally, we can look at costs in terms of fixed costs, which do not change regardless of the level of production, and variable costs, which vary based on production levels.