Which of the following is an illustration of the classification issue?
A) At what amount should an old machine be shown on the balance sheet?
B) At what point should the purchase of art supplies be recorded?
C) Should tools be recorded as an asset or as an expense?
D) At what point should a bill be paid for the purchase of an item?

Question

Quizplus · Accepted Answer

The classification issue pertains to determining whether a transaction should be recorded as an asset, liability, equity, revenue, or expense. In this case, the question of whether tools should be recorded as an asset or expense falls under the classification issue. The other options (A, B, and D) are not related to classification, but rather to valuation, timing, and recognition issues in accounting.

Which of the Following Is an Illustration of the Classification