Applying the Asset Recognition Criteria,which of the Following Accounting Treatments

question 20

Multiple Choice

Applying the asset recognition criteria,which of the following accounting treatments are incorrect?

• A) Transfer duties were included in the cost of acquisition of the photocopier.
• B) Monthly servicing of the photocopier was capitalised.
• C) Monthly servicing of the photocopier was expensed.
• D) Replacement of a minor component part of the photocopier was expensed.

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Definitions:

Insurance Policy

A contract between an insurer and policyholder specifying the claims the insurer is legally required to pay.

Co-insurance Clause

A provision in an insurance policy stating that the insurer and the insured will share losses covered by the policy in a specified ratio.

Fireproof

A property of material or construction that provides resistance to fire, preventing or delaying the spread of fire.

Insured

The individual or entity covered by an insurance policy, who is entitled to benefits in case of a covered loss.