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Expenses represent the dollar amount of resources the entity used to earn revenues during the period. Expenses reported in one accounting period may actually be paid for in another accounting period. Some expenses require the payment of cash immediately while some require payment at a later date. Some may also require the use of another resource, such as an inventory item, which may have been paid for in a prior period. Maxidrive lists five types of expenses on its income statement, which are described in Exhibit 1.3. These expenses include income tax expense, which, as a corporation, Maxidrive must pay on pretax income.Expenses that are representative of the amount of resources used in corporate revenue during the period. Expenses to report in one accounting period may be paid in a different fiscal period. The expenses must be paid immediately in cash, while some people must pay for later. Some people may need to use other resources, such as an inventory list, which may be paid in installments. These expenses include income tax expense that the company must pay on income before taxes.
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