House Flipping Accounting
I have 2 clients who buy homes, fix them and sell them 3-12 months projects. One Clint, categorizes the purchased property as Building (amount of purchase) and under other assets all the expenses that go with the rebuilding, utilities, taxes, etc. The other client, categorizes the properties purchased as Other Cu rent Assets, and the expenses under Cost of Good Sold. Which is correct? Are both correct..if so why do one instead of the other? Thanks.