ACC 100 Study Guide - Final Guide: Intangible Asset, Financial Statement, Income Statement

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The cost of a license is capitalized, meaning the cost is recorded as an asset because it has future beneit for the company. Accounts receivable is an asset account because it is owned (legal right), has future beneit (will result in a future cash inlow), and is due to a past transacion (the sale already happened and you inished the job). If rening equipment is a good idea over the long term you track the cost of equipment rental in an expense account called rent expense. Service revenue to record revenues the business earns from the sale of services: by deducing expenses from your revenues you"ll be able to track your proitability over ime. Website development costs in a long term asset account called website design. Short term liabiliies are called current liabiliies: they are always setled someime during the upcoming year (12 month period).

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