Which of the Following Statements Applies to the Recognition of Property

question 44

Multiple Choice

Which of the following statements applies to the recognition of property, plant, and equipment acquisitions?

• A) It is certain that the item's associated future benefits will flow to the entity.
• B) It is probable that the item's associated future benefits will flow to the entity.
• C) The cost can be measured reliably.
• D) It is probable that the item's associated future benefits will flow to the entity, and the cost can be measured reliably.

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Definitions:

Indorses

Signs or writes one's name on the back of (a document) to make it transferable or to add details, also referred to as endorsing.

Note Payable

A written promise to pay a specified amount of money, usually with interest, at a future time.

Good Faith

A principle that implies honesty and sincerity of intention in the fulfillment of one's duties or negotiation.

Promissory Note

A financial instrument indicating a written promise by one party to pay a definite sum of money to another party under agreed terms.