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Question - All large U.S. companies have policies in which all expenditures (i.e., costs) under a certain dollar amount are expense-d. Many of these costs are for assets, items that are useful to the company beyond the period in which they were purchased.
Required -
a. Explain the proper accounting treatment for costs that are expected to generate benefits in the future.
b. Explain why it might make economic sense to expense some of these items. Upon what exception to the principles of financial accounting would such a decision be based?
Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest. How much control does the Fed have over this longer real rate?
Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.
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