Which of the Following Is NOT an Essential Characteristic of an Asset

question 14

Multiple Choice

Which of the following is NOT an essential characteristic of an asset?

• A) It must be legally owned by the entity.
• B) The entity must have control over the asset.
• C) The transaction giving the entity control over the asset must have occurred.
• D) It is probable that future economic benefits will flow to the entity.

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Definitions:

Direct Write-off Method

A method of accounting for bad debts that involves charging unpaid invoices directly to the expense account when they are determined to be uncollectible.

Allowance Method

An accounting technique used to estimate uncollectible accounts receivable and record them as an expense.

Bad Debts

Money owed to a company that is considered irrecoverable and is written off as a loss.

Outstanding Balances

The total amount of money owed that has not yet been paid.