FINANCIAL ACCOUNTING
6th Edition
ISBN: 9781618533111
Author: DYCKMAN
Publisher: Cambridge Business Publishers
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Question
Chapter 2, Problem 1MC
To determine
Identify the condition that is required to record an item as an asset.
Expert Solution & Answer
Answer to Problem 1MC
Option (d)
Explanation of Solution
Assets: These are the resources owned and controlled by business and used to produce benefits for the company. Assets are classified on the balance sheet as current assets, non-current assets, property, plant, and equipment, and intangible assets.
Justification for the given options:
- a. Asset must be owned and controlled by the company. Therefore, this option is incorrect.
- b. Future benefits can be reliably measured from an asset. Therefore, this option is incorrect.
- c. Assets are classified as current, non-current (plant, property, and equipment, and intangible assets). Therefore, this option is incorrect.
- d. Assets are expected to yield the future benefits. Therefore, this option is correct.
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Students have asked these similar questions
Which of the following would not explain the difference between current and non-current assets?
A.The future benefit of current assets will generally be used up within the entity's operating cycle
B.An expenditure is classified as a non-current asset if it is considered to be material
C.The nature and intention of the business can help determine whether an expenditure should be classified as a non-current asset
D.An asset is classified as non-current if it is intended to be used within the business for a considerable period of time
When does a company record an asset related to a gain contingency?
a. When future events will possibly occur and the amount can be reasonably estimated.
b. When there is a remote chance that future events will occur and the amount can be reasonably estimated.
c. When future events are probable to occur and the amount can be reasonably estimated.
d. Gain contingencies are not recorded.
How long does an asset remain the most useful to the company? What do statutes and accounting rules mandate about assessing an asset's span of economic value?
Chapter 2 Solutions
FINANCIAL ACCOUNTING
Ch. 2 - Prob. 1MCCh. 2 - Prob. 2MCCh. 2 - Prob. 3MCCh. 2 - Prob. 4MCCh. 2 - Prob. 5MCCh. 2 - Prob. 1QCh. 2 - Prob. 2QCh. 2 - Prob. 3QCh. 2 - Prob. 4QCh. 2 - Prob. 5Q
Ch. 2 - Prob. 6QCh. 2 - Prob. 7QCh. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10QCh. 2 - Prob. 11QCh. 2 - Prob. 12QCh. 2 - Prob. 13QCh. 2 - Prob. 14MECh. 2 - Prob. 15MECh. 2 - Prob. 16MECh. 2 - Prob. 17MECh. 2 - Prob. 18MECh. 2 - Prob. 19MECh. 2 - Prob. 20MECh. 2 - Prob. 21MECh. 2 - Prob. 22MECh. 2 - Prob. 23MECh. 2 - Prob. 24MECh. 2 - Prob. 25MECh. 2 - Prob. 26MECh. 2 - Prob. 27MECh. 2 - Prob. 28MECh. 2 - Prob. 29MECh. 2 - Prob. 30MECh. 2 - Prob. 31MECh. 2 - Prob. 32MECh. 2 - Prob. 33MECh. 2 - Prob. 34ECh. 2 - Prob. 35ECh. 2 - Prob. 36ECh. 2 - Prob. 37ECh. 2 - Prob. 38ECh. 2 - Prob. 39ECh. 2 - Prob. 40ECh. 2 - Prob. 41ECh. 2 - Prob. 42ECh. 2 - Prob. 43ECh. 2 - Prob. 44ECh. 2 - Prob. 45ECh. 2 - Prob. 46ECh. 2 - Prob. 47ECh. 2 - Prob. 48ECh. 2 - Prob. 49PCh. 2 - Prob. 50PCh. 2 - Prob. 51PCh. 2 - Prob. 52PCh. 2 - Prob. 53PCh. 2 - Prob. 54PCh. 2 - Prob. 55PCh. 2 - Prob. 56PCh. 2 - Prob. 57PCh. 2 - Prob. 58PCh. 2 - Prob. 59PCh. 2 - Prob. 60PCh. 2 - Prob. 61PCh. 2 - Prob. 62PCh. 2 - Prob. 63PCh. 2 - Prob. 64PCh. 2 - Prob. 65PCh. 2 - Prob. 66PCh. 2 - Prob. 67PCh. 2 - Prob. 68PCh. 2 - Prob. 69PCh. 2 - Prob. 70PCh. 2 - Prob. 71CPCh. 2 - Prob. 72CP
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