All large U.S companies have policies in which all expenditures under a certain dollar amount are-expensed. Many of these expenditures are for assets, items that are useful to the company beyond the period in which they were purchased.
a. Explain the proper accounting treatment for expenditures for items that are expected to generate benefits in the future.
b. Explain why it might make economic sense to expense some of these items. Upon what exception to the principles of financial accounting would such a decision be based?