To Be Included in Property, Plant, and Equipment, an Asset

question 9

Multiple Choice

To be included in property, plant, and equipment, an asset must have all of the following EXCEPT

• A) the asset must be held for use
• B) the asset must have an expected life of a normal operating cycle
• C) the asset must be tangible in nature
• D) the asset must have an expected life of more than one year

---

Definitions:

Negotiated

The process of discussing terms in order to reach a mutual agreement, often used in the context of contracts, salaries, and business deals.

Fixed Amount

A specified sum that does not vary or change under specified conditions.

Principal

A main party to a transaction, such as the owner of a business or the party who has authorized an agent to act on their behalf.

Interest

The cost of borrowing money, typically expressed as a percentage of the principal, paid by the borrower to the lender for the use of their money.