Applying the Asset Recognition Criteria,which of the Following Accounting Treatments

question 16

Multiple Choice

Applying the asset recognition criteria,which of the following accounting treatments are incorrect?

• A) Transfer duties were included in the cost of acquisition of the photocopier.
• B) Monthly servicing of the photocopier was capitalised.
• C) Monthly servicing of the photocopier was expensed.
• D) Replacement of a minor component part of the photocopier was expensed.
• E) None of the given answers.

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Definitions:

Bonds Payable

Long-term liabilities represented by promissory notes issued by a company to borrow money, to be repaid at a specific future date along with interest.

Sold at Premium

Refers to the selling of an asset or security at a price higher than its face value or original cost.

Bond Sinking Fund

A fund set aside by a debtor to repay a bond or loan at its maturity, contributing to financial stability.

Future Maturity

A term referring to the date on which an investment or payment becomes due for settlement.