8. An item of property, plant and equipment should recognised as an asset if and only if: A. it is probable that future economic benefits will flow to the entity concerned. B. the cost of the item can be measured reliably C. Both A & B D. None of the above
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8. An item of property, plant and equipment should recognised as an asset if and only if:
A. it is probable that future economic benefits will flow to the entity concerned.
B. the cost of the item can be measured reliably
C. Both A & B
D. None of the above
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- __________ is defined in the Conceptual Framework as ‘a present obligation of the entity to transfer an economic resource as a result of past events’. Select one alternative: Expense Income Asset LiabilityThe Intangible assets are fair valued on two methods the Cost and the Income or Present Value (PV) methods. What is the Concluded Value?II. When the cárrying amount or the expected ultimate cost of the qualifying asset exceeds its recoverable amount or net realizable period shall not exceed the amount of borrowing costs it incurred I. The amount of borrowing costs that an entity capitalizes during a Which of the following statements is correct? in that period. value, the carrying amount is written down or written off i accordance with the requirements of other Standards. a. Ionly C. Both I and II b. II only d. Neither I nor II
- 5. Borrowing costs that are directly attributable to the acquisition or construction of a qualifying asset are accounted for by an SME as a. Outright expenses b. Capitalizable costs c. a or b d. a component of other comprehensive incomeWhich statement on property, plant and equipment (PPE) is true? * a. PPE items may include assets lacking physical substance b. Assets held for sale shall be classified as PPE while unsold c. As long as an item of PPE provides benefit, regardless of measurability of its cost, it shall be recognized in the books d. When the amount is immaterial, an item may be expensed outright rather than capitalized as PPE e. none of the aboveWhich one of the following is an essential characteristic of an asset? A. The inflow of future economic benefits is controlled by the enterprise B. It must be exclusively owned and must be exchangeable C. The cost of the asset can be measured accurately D. It is a result of either a past or predictable transaction or activity
- A right of use asset is initially measured at costs and subsequently measured using the A. Cost model B. Fair value model C. Revaluation model D. Any of theseWhich of the following statements is/are FALSE: I. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset’s useful life and increase the asset’s capacity is capitalised. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories: distribution & selling costs; administrative expenses; other operating expenses (or income). IV. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. V. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of…5. An intangible asset may be recorded:A. if acquired from an external party at a cost.B. if it is internally generated and fits the definition of an asset and meets the associated recognition criteria.C. at a value other than cost if that value more reliably records the worth of the intangible asset.D. at the cost of the asset, which must exclude any additional expenditure required to prepare the asset for use.
- Which of the following is INCORRECT regarding depreciation? Select one: O a. It is not a matter of valuation. O b. It is a means of cost allocation. Oc. O d. It is an attempt to reflect the fair market values of the related assets. It is part of the matching of revenues and expenses.Evaluate the following statements:S1. The borrowing cost is capitalized when the entity undertakes activities that are necessary to prepare the asset for the intended use or sale.S2. Borrowing cost incurred while land acquired for building purposes is held without any associated development activity does not qualify for capitalization. a.False, False b.True, True c.False, True d.True, FalseRevenue Expenditures are Select one: O a. Expenses related to Business Operation O b. None of the these O c. Have no direct effect on profit O d. Expenses incurred when purchasing non- current assets