Jackson Ltd Is Developing Computer Software for Use in Its

question 66

Multiple Choice

Jackson Ltd is developing computer software for use in its courier delivery service business.So far the company had spent $50 000 but the software is still unfinished and not expected to be finished in time for the preparation of the reports.As a result,the company had to purchase a computer package amounting to $100 000 to finalise its accounts.There is no further use for the unfinished software as it is expected that the purchased computer package could be used by the entity for another 10 years.Which accounting treatment would be consistent with the Framework?

• A) recognise an asset of $150 000
• B) recognise an expense of $150 000
• C) recognise an asset of $100 000 and expense of $50 000
• D) recognise an asset of $50 000 and expense of $100 000

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Definitions:

Prior Probabilities

Initial probabilities used in Bayesian analysis, representing beliefs about probabilities before new evidence is taken into account.

Joint Probabilities

The probability of two events occurring together and at the same point in time.

Union Probabilities

The probability of the occurrence of at least one of two or more events.

Likelihood Probabilities

Refers to the use of probabilities to express the plausibility of parameter values given a sample of data, central in statistical inference.