会计审计专业英语 (17)

Expenses are often called the "costs of doing business," that is the cost of the various activities necessary to carry on a business.
An expense always causes a decrease in owners' equity.
17-2-1 Cost vs. Expense
Cost is the amount of cash or cash equivalents paid or the fair value of the other consideration given to acquire an asset at the time of its acquisition or construction.
Expenses are decreases in economic resources, either by way of outflows or reductions of assets or incurrence of liabilities, resulting from an entity's ordinary revenue generating or service delivery activities.
the Matching principle
Timing is an improtant factor in matching (offsetting) revenue with the related expenses.
17-3 Specific Expense Items
Cost of Goods Sold. CoБайду номын сангаасt of goods sold represents a significant expense category in many income statements. The determination of cost of goods sold involves allocating the total cost of goods available for sale during each period between (1) the cost of goods sold and (2) the cost of the ending inventory. Depreciation Expense. Some assets are used or consumed in the earnings process over a period of time and they must be expensed or depreciated gradually. Depreciation expenses should be recognized in a rational and systematic manner appropriate to the nature of the long-lived asset. All depreciation methods are profoundly affected by the management's choice of useful lives and residual values.
When the benefits of the cost have been used and we put that cost or a portion thereof on the income statement, we have recognized an expense. Often, the two occur at the sametime, or at least in the same accounting period.
17-2-2 Expense Recognition
In order for an item to be recorded as an expense, it must meet the general criteria: meet the definition of expenses and have a valid measurement basis and amount. Expense recognition is highly dependent on the revenue recognition point chosen by a company. A significant relationship exists between revenue and expenses. Expenses are incurred for the purpose of producing revenue.
However, there are many expenditures that result in a cost that is not recognized immediately as an expense. Thus, we must be very careful not to use the word "expense " when we really mean "cost".
Unit 17 Expense
Learning Objectives
After studying this unit, you should be able to:
1. Define expense in relation to assets.
2. Describe the expense recognition criteria. 3. Explain the relationship between revenue and expense recognition. 4. Identify the major categories of expense. 5. Explain depreciation expense and tell the difference between depreciation expense and other expense items. 6. Describe the accounting for research and development costs.
Key Terms
cost flow (成本流转)
cost flow assumption (成本流转假设)
cost of goods sold (销售成本) depreciation expense (折旧费用) research and development costs (研究与开发成本)
17-1 Definition