Thank you so much for this well displayed example. May I confirm that the reason you debited expenses rather than logging it as an asset was because the product was under the $2,500 threshold?
There are several reasons for why this could be the case - if the benefits of what you spend are short-lived, then they are expensed....on the contrary, if the benefits are long-lived, then you can capitalize them as an asset and depreciate it over time... Further, in line with your comment, if the amount spent is insignificant, expensing it is the way to go (think of a $10 pair of scissors - just expense it even if you'll probably use it for several years)!
The easiest way to visualize this is imagine when a benefit (could be cash or anything else) leaves from account A to B -> then you typically credit the source account A and debit the destination account B. You'll have to put aside the real-world definition of crediting and debiting your bank account. Hope this helps!
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love that you included both perspectives. Thank you so much!
I will not need my Prof. in the college any more! Appreciate very much your work, Sir.
what a great professor , you are better than my prof, next week is our exam and i still don't get it. but now its all fine thank u sir
Thank you sir explained in detailed way, please make a video on provisions eg. Bad debts and depreciation..
The way you have explained is superb
very well explained, thank you for putting Deferred & accrual together, it is very helpful.
this Video cleared all my doubts. Thank you very much sir..
Glad to be of help!
Very clever explanation, putting all examples in one sheet.
Easy to understand. Thanks for this Vedio.
You are really really really great sir..plz make more videos
Very clear. Thank you
So clear. Thanks for the video❤
You are very good sir thank you 🙏🏻🙏🏻 love from india
Very well explained
Fabulously explained..
Amazing! Thank you so much for sharing this!
Very helpful video thank you ☺️
Thank you Sir your way of explaining is awesome i really searching this type of video so long. This video cleared my all doubts. Thank you so much 🥰
Thank you very much for your explanation, it helped me alot
Glad to hear that!
Wow great content ❤❤❤
Thanks
Very well explained, Thank you
Glad it was helpful!
Thank you so much for this well displayed example. May I confirm that the reason you debited expenses rather than logging it as an asset was because the product was under the $2,500 threshold?
There are several reasons for why this could be the case - if the benefits of what you spend are short-lived, then they are expensed....on the contrary, if the benefits are long-lived, then you can capitalize them as an asset and depreciate it over time... Further, in line with your comment, if the amount spent is insignificant, expensing it is the way to go (think of a $10 pair of scissors - just expense it even if you'll probably use it for several years)!
@@joefessor Awesome. I understand now. Thank you so much!
Explained very well 💯
Why in Accurred expenses it becomes different in borrowing
Difficult to imagine why cash would be credited to buyer when money goes out of his account, and seller is debited when he receives the amount.😐
The easiest way to visualize this is imagine when a benefit (could be cash or anything else) leaves from account A to B -> then you typically credit the source account A and debit the destination account B. You'll have to put aside the real-world definition of crediting and debiting your bank account. Hope this helps!
Very well explained