Which of the following is an essential requirement for an asset to exist for accounting purposes?
A) An asset must be tangible.
B) An asset must have been exchanged for another asset.
C) An asset must be under the control of the entity.
D) An asset must have been acquired at a cost to the entity.

Question

Quizplus · Accepted Answer

An asset for accounting purposes must be under the control of the entity, meaning the entity has the ability to use the asset to generate economic benefits. This is a fundamental requirement for recognition of an asset in the financial statements, according to accounting standards like the International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles (GAAP).

Which of the Following Is an Essential Requirement for an Asset