What Are the General Recognition Criteria for Non-Cash Assets Under

question 84

Multiple Choice

What are the general recognition criteria for non-cash assets under GAAP?

• A)If the item meets the definition of an asset, it must have an indefinite life.
• B)If the item meets the definition of an expense, it must be measurable.
• C)In order for the item to be an asset, it will have future economic benefits, be under the entity's control, and result form past transactions.
• D)Future transactions can be recorded under GAAP.

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Definitions:

Payment of Dividends

The distribution of a portion of a company's earnings to its shareholders as determined by the company's board of directors.

Factory Overhead

Indirect costs related to manufacturing, such as utilities, maintenance, and salaries of supervisory personnel not directly involved in production.

Cost

The amount of money that needs to be spent to purchase, produce, or maintain something.

Benefit

An advantage or profit gained from something, often referring to employment perks beyond salary, such as health insurance.