(a) Explain the terms cost and expense as they are used for financial reporting. The explanation should indicate distinguishing characteristics of the terms, their similarities, and interrelationships.
(b) Classify each of the following items as a cost, expense, or other category. Explain how the classification of each item can change.
(1) Cost of goods sold
(2) Uncollectible accounts expense
(3) Depreciation expense for plant machinery
(4) Organization costs
(5) Spoiled goods