A Cost Ought to Be Recognised as an Asset When

question 61

Multiple Choice

A cost ought to be recognised as an asset when:

• A) it is probable that it will provide future economic benefits.
• B) it may provide future economic benefits.
• C) it involves drawings by the owner.
• D) the cash has been paid.

---

Definitions:

Planning Budget

A financial plan that outlines projected income and expenses over a future period, used to guide a business's strategic planning.

Revenue Variance

This is the difference between actual revenue earned and the expected or budgeted revenue.

Wells Serviced

The number of wells maintenance, repair, or service operations have been performed on, typically in the oil and gas industry.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of changes in production level or sales volume, such as rent, salaries, or insurance.