What does the statement costs can be assets or expenses mean

What does the statement \"costs can be assets or expenses\" mean?

Solution

Cost Can Be Assets: Costs which have the future economic benefits is recorded as an assets E.g. We purchased a machinery for plant expansion so this is a expense but shown as assets because the future economic potential.

Expenses: Cost that is used in the process of earning revenue is recorded as an expense E.g. administrative salaries, and product cost associated with products sold