Gains and losses from asset sales are considered an operating activity. Group of answer choices True False
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- Asset Valuation and Income Recognition. Asset valuation and recognition of net income closely relate. Explain, including conditions when they do not.Which of the following accounts would not be included in the Acquisition and Payment for Long-Lived Assets Cycle? a. Revenue b. Depreciation expense c. Gain on disposal d. EquipmentTrue or False: Depreciation is an example of a contra asset account.
- TRUE OR FALSE The principle of historical cost states that acquired assets should be recorded at their actual cost and not at what management thinks they are worth as at reporting date.Which accounting concepts requires non-current assets to be valued at cost less accumulated depreciation, rather at their enforced saleable value a. Prudence b. Relevance c. Comparability d. Going concernWhich of the following is not part of the definition of an asset O a. Control of a resource O b. Resulting from a past event O c. Inflow of economic benefits Od. During the accounting period
- Which 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…Which is not an expense? A. costs of goods sold or services rendered B. loss on disposal of a noncurrent asset C. write-off of a worthless intangible D. use of entity resources E. answer not givenWhen 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.
- 1. If a Revaluation of an asset is done for the first time and there is a revaluation gain, this should be shown in a. Other Comprehensive Income as a Negative figure b. Other Comprehensive Income as a Positive figure c. The Statement of Profit and Loss Account as an Expense d. The Statement of Profit and Loss as IncomeThe generally accepted accounting principle that supports recording the value of a property at the purchase price when the market value is higher is the: A. conservatism principle B. going concern principle C. monetary principle D. cost principleWhen is revenue recognized in the following situations?(a) Revenue from selling products, (b) revenue from servicesperformed, (c) revenue from permitting others to usecompany assets, and (d) revenue from disposing of assetsother than products.
