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1. How are costs and investments related?
Costs spend money to run the business now, and investments spend money to prepare the business for the future.
Costs and investments are the same things.
Costs are money you spend on others and investment is money you spend on yourself.
2. What term is used to explain spending money in a current time period to get a benefit in a future time period?
3. Why is investment expense reporting delayed on some financial statements in companies using the accrual method?
To align the investment expense with the time period in which the investment benefit occurs.
When the company delays paying the supplier, they can delay reporting the investment expense.
To manage the amount of reported costs so as to smooth out the reported profit.
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