Which of the Following Is Not True

question 15

Multiple Choice

Which of the following is not true?

• A)Gains (losses) are increases (decreases) in assets from peripheral or incidental transactions of an entity and from other transactions and events affecting the entity except those that result from revenues (expenses) or investments by (distributions to) owners.
• B) Firms usually report gains and losses from sales of assets or settlements of liabilities at a net amount; that is, equal to the difference between the net asset received and the carrying value of the asset sold or between the net asset given and the carrying value of the liability settled.
• C)Gains and losses may arise from the remeasurement of assets and liabilities.
• D)Firms realize gains and losses when they sell or exchange assets or settle liabilities in market transactions.
• E)Firms recognize gains and losses when those items enter the measurement of net income or other comprehensive income.

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Definitions:

Prepaid Rent

The amount paid for rent before it is due, recorded as an asset on the balance sheet and expensed over the period the payment covers.

Rent Revenue

The income earned from leasing out properties or assets to tenants under rental agreements.

Unearned Rent

Payment received for rent before the rental period has occurred, classified as a liability until earned.

Office Supplies

Items used in offices on a regular basis for administrative tasks or operations, including pens, paper, and staplers.