Archive for December, 2020

When should costs be expensed and when should costs be capitalized?

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capitalize expenses

This complexity can make small businesses hesitate to properly capitalize their expenses. Expense is the cost that company pays to support the operation which aims to make revenue for the company. Based on the accounting matching principle, the company needs to record expenses in the same accounting period in which the revenue is made. The revenue is the result of the company’s expenses, so both of them must be recorded in the ...

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