A Test for Distinguishing Between an Asset and an Expense

question 21

Multiple Choice

A test for distinguishing between an asset and an expense is

• A)whether the item will be turned into cash by the end of the accounting period.
• B)whether the benefit extends into the next accounting period.
• C)whether the payment is made in cash.
• D)the amount of the transaction.

---

Definitions:

Randomly Determined

A process or selection made without any predictable pattern or bias, often through the use of chance or randomness.

Hand-Eye Coordination

The ability to use one's sight to guide the movements of one’s hands, essential in tasks from simple to complex activities.

Habituate

The process by which an organism becomes accustomed to a stimulus after repeated exposure, leading to a decrease in response.

Dominant Action

The primary or most influential action in a series of movements or decisions, often leading or setting a precedent.