Which of the following is an illustration of the classification issue?
A)At what amount should land be shown on the balance sheet?
B)At what point should the payment of salaries to employees be recorded?
C)Should supplies 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 refers to deciding whether to classify an item as an asset, liability, equity, revenue, or expense on the financial statements. The question of whether to record supplies as an asset or expense is an example of a classification issue. Options A, B, and D are examples of timing or recognition issues, which refer to deciding when to record transactions, events, or conditions in the financial statements.

Which of the Following Is an Illustration of the Classification