Why Would a Company Recognize the Cost of an Asset

question 27

Multiple Choice

Why would a company recognize the cost of an asset on its balance sheet rather than treat it as an expense on the date it is acquired?

• A)Conservatism requires this recognition.
• B)Matching requires costs to be matched against the related revenues of the asset.
• C)Strictly to record the amount in the most economically favorable manner possible for the company.
• D)The stable dollar concept will not allow inflation to be added to expenses, but does allow inflation to be added to assets.

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Definitions:

Disciplinary Cases

Instances requiring formal action when employees fail to adhere to organizational policies, highlighting the mechanisms in place for upholding standards.

Sense of Justice

An innate or acquired perception that guides individuals in discerning right from wrong and fairness in various situations.

Positive Discipline

An approach to teaching and nurturing that focuses on encouraging good behavior in children through positive reinforcement rather than punishment.

Non-Punitive Discipline

A disciplinary approach that focuses on instructive or corrective actions rather than punishment to address employee issues, emphasizing learning and future improvement.