If It Is Not Probable That Expenditure Will Generate Future

question 2

Multiple Choice

If it is not probable that expenditure will generate future benefits,the accounting treatment should bE.

• A) To treat it as a deferred asset.
• B) To amortise it over a period of no more than two operating cycles.
• C) To expense it.
• D) To treat it as an unearned revenue.
• E) None of the given answers.

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Definitions:

Bidder

An individual or entity that makes an offer in response to a tender, aiming to secure a contract or project.

Incentive Payment

A financial reward offered to encourage or motivate specific actions or behaviors in individuals or groups.

Target Amount

The specific financial goal or budget set for a project, initiative, or investment.

Cost Reimbursable Contract

A type of contract where a contractor is paid for all of its allowed expenses to a set limit plus additional payment to allow for a profit.