Question
Multiple Select Question Select all that apply Which of the following statements is (are) accurate regarding equipment purchased within a business? Equipment cost is initially recorded as an asset and the cost is allocated over time to expense. Equipment purchases are expensed in their entirety, in the period in which they occur. D Equipment is reported on the left side of the accounting equation. D Equipment purchases are reported on the balance sheet. Equipment is an asset.
Answer
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Beatrice
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Answer
### A. Equipment cost is initially recorded as an asset and the cost is allocated over time to expense.### C. Equipment is reported on the left side of the accounting equation.### D. Equipment purchases are reported on the balance sheet.### E. Equipment is an asset.
Explanation
## Step 1: Identify initial recording of equipment cost### Equipment cost is initially recorded as an asset and allocated over time through depreciation (Expense).## Step 2: Determine treatment of equipment expense### Equipment purchases are not expensed in their entirety when purchased; instead, the cost is allocated over time.## Step 3: Identify correct placement in accounting equation### Equipment is reported as an asset, which is on the left side of the accounting equation.## Step 4: Identify report placement in financial statements### Equipment purchases are reported on the balance sheet as assets.## Step 5: Classification of equipment### Equipment is classified as an asset.