Accounting assignment

Q1: Discuss the concept of expensing plant assets over its useful life for
different categories of plant assets.

Ans; A plant asset is an asset with a useful life of more than one year that is
used in producing revenues in a business's operations. When we use these
plant asset has value is decreasing which we include is a expense just like we
use building, equipment, Furniture and fixtures, Vehicles, Office equipment,
etc when we use these asset in the business operation his value decrease
with the passage of time and we add there value is a expense.

Q2; Differentiate between revenue & capital expenditure.

Ans; Capital expenditure

Expenditures for the purchase of plant assets are called capital expenditures
and are recorded in asset accounts. Accountants often use the verb capitalize
to mean charging an expenditure to an asset account rather than to an
expense account.
It is incurred for acquisition of fixed assets for use in business
It increases earning capacity of the business
Its benefit extends to more than one year
It is debited to an asset account
It is shown in the balance sheet
Revenue expenditure
Expenditures for ordinary repairs, maintenance, fuel, and other items
necessary to the ownership for use of plant and equipment are called revenue
expenditures and are recorded by debiting expense accounts.
It is incurred for running of business,
It is incurred for earning profits
Its benefit is exhausted with in the year
It is debited to an expense account
It is shown in the trading profit and loss account.
Q3; How matching principle is related to the concept of expensing of all categories of
plant assets?
Ans; I do not understand this question
Q3; Differentiate between Different types of Intangible assets excluding Goodwill.
Ans; Franchise
Franchise agreements are another type of intangible asset that grants the
legal right to a business to operate using the name of another company or
sell a product or service developed by another company. These are
classified as assets because the business owners reap monetary gains
with the help of these intangible assets.

For example, many fast food restaurants like KFC, McDonald’s, Subway,
Dominos, etc. operate using a franchise system. Here the franchisor
grants varying amount of autonomy to the franchisees to use the brand
name and benefit from franchisor’s extensive marketing.

Patents

A patent is a type of intangible asset that grants a business the exclusive

right to manufacture, sell or use a specific invention. A company can
purchase the patent from another company or it can invent a new product
and receive a patent for it.

Copyrights
Copyright grants an extensive right to the business to reproduce and sell
a software, book, journal, magazine, etc. It is an intangible asset used to
secure legal protection by preventing others from reproducing or
publishing a work of authorship.

Research and Development

Research is a planned and detailed investigation into a product or service
for gaining scientific or technical know-how. Development is the
application of such researches to develop new and better products and
service than the current portfolio a company has.
R&D is a part of internally generated intangible assets of a company.
Companies spend millions of dollars on R&D and hence, it is a valuable
intangible asset capable of taking a company to new heights.