Goodwill

“Capitalised” is the alternative expression to “expensed” for a debit entry

When an item of a capital nature is acquired, the double entry will be to credit cash (or payables) but where’s the debit? Because it’s an item of a capital nature the debit will be to an asset account and that, in turn, will appear on successive statements of financial position until the asset has been fully depreciated

But when a business faces, for example, the payment of an electricity invoice the credit entry is still to the cash account but this time the debit is to an expense account instead of an asset account and that, in turn, will be closed off to the statement of profit or loss each year

OK?

You’re welcome