Which of the Following Correctly Describes an Asset

question 24

Multiple Choice

Which of the following correctly describes an asset?

• A)An obligation of the entity
• B)An investment the owners have made
• C)An economic resource that provides future benefits
• D)An economic sacrifice made to earn revenue

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Definitions:

Rigid Accounting Rules

Accounting practices that are strictly defined with little to no room for interpretation or flexibility in their application.

Infrequent Event

An event or transaction that occurs rarely and is not expected to happen regularly in the normal course of business.

Continuing Operations

The parts or actions of a company that are anticipated to persist over the coming years, not including any operations that have been ceased.

Extraordinary Item

A significant and unusual transaction distinct from the ordinary activities of the business, no longer separately classified in financial statements due to changes in accounting standards.