An asset represents a future economic benefit, whereas an expense represents the consumption of an economic benefit.
to elaborate,
think of say, "Stock" (stuff we sell in order to gain profit)
If we have $x of stock on hand, it will represent a future economic benefit, as we bought it for $x, but plan to sell it for e.g $x+10
Therefore, the future economic benefit stock represents is cash.
Consumption of an economic benefit speaks for itself.
Once we sell this stock, it can sort of be said that we've "consumed" it, by using it up and selling it.
So, when we sell it, an expense called "Cost of Sales" arises.
This expense, will be equal to the amount that we bought the stock for, because that is the value of the stock, which we have used up.
By this I mean, if we bought the stock for $10 and we sold it for $20.
Our cost of sales expense will be $10, not $20, As this is the amount by which we have used our stock up.
Hope that's clear
also, in regards to your inputs, processing, outputs
it's just describing the way accounting works.
To VERY briefly summarise it.
we receive our data/information from source documents (which provide evidence and details of transactions)
Therefore, we input data from source documents.
INPUT = SOURCE DOCUMENTS
kinda forgot the rest, pretty bad considering im a 3/4 students aiming for 45+
But, processing is like "Recording" stuff and maybe reporting... not sure :/
ill have a look in a sec
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