Question

What is the primary difference between an asset and an expense? Multiple Choice An expense shows up on the balance sheet, while an asset shows up on the income statement Companies should try to maximize assets, while minimizing expenses. An asset is purchased in cash, while an expense is financed on account. An asset has future value, while an expense is used up in the current period. O Assets are temporary accounts, while expenses are permanent. An asset has a debit balance, while an expense has a credit balance.

Answer 1

Answer: An asset has future value, while an expense is used up in the current perod.

All assets are investments for the company and hence have future value. Expenses once incurred are gone and is fully used up for the current period.

Expenses are shown in the income statement and assets are shown under balance sheet.

Companies should incur required expenses to run business and invest only in assets required.

Assets or expenses may be purchased or incurred in cash or on account.

Assets are permanent and expenses are temporary.

Both assets and expenses have debit balances.