Under the currently proposed definition of an asset, what is the most important aspect to consider when deciding whether the item should be recognized as an asset?
A)The item represents a present economic resource to which the entity has a right
B)The item is shown on the balance sheet
C)The transaction underlying the resource has occurred
D)The item is measurable

Question

Quizplus · Accepted Answer

According to the currently proposed definition of an asset, the most important aspect to consider when deciding whether the item should be recognized as an asset is whether it represents a present economic resource to which the entity has a right. This means that the entity has control over the resource and can use it to generate future economic benefits. The other options listed are also important considerations, but they are not the most critical factor in determining whether an item meets the definition of an asset.

Under the Currently Proposed Definition of an Asset, What Is