Financial Accounting
14th Edition
ISBN: 9781111823450
Author: Weil, Roman L./
Publisher: Cengage Learning
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Students have asked these similar questions
What assets are necessary to support the operations of the entity, and what are management's long-range plans for growing the entity's asset base?
Which of the following statement best defines an asset?
a.
An asset is a resource owned by the entity with a financial value
b.
An asset is resource controlled by the entity from which future economic benefits are expected to be generated
c.
An asset is a resource controlled by an entity because of past events
d.
An asset is a resource controlled by an entity as a result of past events from future economic benefits are expected to be generated
How does the Conceptual Framework define an asset?
Select one alternative
A resource to which an entity has a future commitment as a result of past events and from which future economic benefits are expected to flow from the entity
A resource controlled by an entity as a result of past events and from which future economic benefits are expected to flow to the entity
A resource owned by an entity as a result of past events and from which future economic benefits are expected to flow to the entity
A resource over which an entity has legal rights as a result of past events and from which economic benefits are expected to flow to the entity
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- Do you think a company like Target would have significant research anddevelopment costs or capitalized interest related to self-constructed assets? Explain.arrow_forwardWhich statement below best describes an investment center? a. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply. b. The authority to make decisions affecting the major determinants of profit, including the power to choose its markets and sources of supply, and significant control over the amount of invested capital. c. The authority to make decisions over the most significant costs of operations, including the power to choose the sources of supply. d. The authority to provide specialized support to other units within the organization. e. The responsibility for developing markets for and selling of the output of the organization.arrow_forwardChoose the correct. In which of the following areas does the IASB not allow firms to choose between two acceptable treatments?a. Measuring property, plant, and equipment subsequent to acquisition.b. Measuring noncontrolling interest in a business combination.c. Recognizing development costs that meet criteria for capitalization as an asset.d. Classifying interest paid in the statement of cash flows.arrow_forward
- In which of the following areas does the IASB not allow firms to choose between two acceptable treatments?a. Measuring property, plant, and equipment subsequent to acquisition.b. Measuring noncontrolling interest in a business combination.c. Recognizing development costs that meet criteria for capitalization as an asset.d. Classifying interest paid in the statement of cash flows.arrow_forwardWhat is the appropriate accounting treatment for the value assigned to in-process research and development acquired in a business combination?a. Expense upon acquisition.b. Capitalize as an asset.c. Expense if there is no alternative use for the assets used in the research and development and technological feasibility has yet to be reached.d. Expense until future economic benefits become certain and then capitalize as an asset.arrow_forwardChoose the correct. What is the appropriate accounting treatment for the value assigned to in-process research and development acquired in a business combination?a. Expense upon acquisition.b. Capitalize as an asset.c. Expense if there is no alternative use for the assets used in the research and development and technological feasibility has yet to be reached.d. Expense until future economic benefits become certain and then capitalize as an asset.arrow_forward
- How should research and development expenditure be dealt with in an entity's financial statements? a- Research expenditure should always be written off as an expense but development expenditure should always be capitalised as an intangible asset b- Research and development expenditure should always be written off as an expense c- Research expenditure should always be written off as an expense but development expenditure should be capitalized as an intangible asset if it satisfies certain conditions d- Research and development expenditure should always be capitalised as an intangible assetarrow_forwardWhat is the role of financial intermediaries in asset transformation? Briefly explain along with the types of asset transformation undertaken by the financial intermediaries.arrow_forwardIn order for an asset to be recognized in the financial statements, which of the following definition is consistent with the IASB framework? Select one: a. Asset is a resource controlled by the entity from which future economic benefits are expected to flow to the entity. b. Asset is a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. c. Asset is a resource controlled by the entity as a result of future events and from which future economic benefits are expected to flow to the entity. d. Asset is a resource controlled by the entity as a result of present events and from which future economic benefits are expected to flow to the entity.arrow_forward
- What are the reasons that cause a firm to construct fixed assets for its own use?arrow_forwardIf an organization’s operations rely heavily on the specialized expertise of its management team, would you expect there to be a higher or a lower correspondence between the net assets recognized in the statement of financial position (balance sheet) and the total market value of the organization’s securities, relative to an organization that relies more on tangible assets (for example, commonly used plant and machinery) to generate its income?arrow_forwardAssess the nature of the risks that an organisation can be exposed to when undertaking a new investment?arrow_forward
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