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Distinguishing between an expense and a cost. Christy Byrd tells you that the accountants where she works are real hair splitters. For example, they make a big issue over the difference between a cost and an expense. She says the two terms mean the same thing to her.
Required
a. Explain to Christy the difference between a cost and an expense from an accountant's perspective.
b. Explain whether each of the following events produces an asset or an expense.
(1) Purchased a building for cash.(2) Purchased supplies on account.(3) Used supplies on hand to produce revenue.(4) Paid in advance for insurance on the building.(5) Recognized accrued salaries.
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