Which One of the Following Statements Is True

question 1

Multiple Choice

Which one of the following statements is true?

• A) External events (transactions) involve interactions between an entity and a party outside the entity.
• B) Every event or transaction which affects an entity is identified from a source document.
• C) All economic events can be reliably measured.
• D) The movement of raw material into production is an external event.

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Definitions:

Lessor

The party in a lease agreement who owns the leased asset and grants the lessee the right to use the asset for a specified term in exchange for payment.

Amortization Policies

Guidelines or practices a company follows to systematically reduce the book value of its intangible assets over their useful life.

Capital Lease

A long-term lease agreement considered to be a purchase of the asset for accounting purposes, where the lessee assumes both the risks and benefits of asset ownership.

Residual Value

The forecasted sale price of an asset at the conclusion of its operational lifespan.