COMMERCE 1AA3 Lecture Notes - Lecture 1: Mulch, Capital Asset, Current Asset

• School: McMaster University
• Department: Commerce
• Course: COMMERCE 1AA3
• Professor: Emad Mohammad

Document Summary

If the future bene ts of the expenditure are long-term: a capital asset (such as cars) If the future bene ts of the expenditure are short-term: a current asset (such as inventory and supplies) If the bene ts are immediate: an expense (such as advertising, rent, wages, etc ) Assets that are actively used in operations to generate future bene ts beyond one year. Can be classi ed into tangible and intangible assets. The proceeds from the sale of scrap. Builder turned the trees into mulch and sold it. Such proceeds are not classi ed as sales revenues; rather they are a reduction in the cost of land. Basket purchases do not specify the prices of individual assets in the basket. When you buy a house, you also own the land. When you purchases the house, it doesn"t break down the costs of the di erent assets.