A future economic benefit owned or controlled by an entity is:
A)A revenue.
B)An asset.
C)A liability.
D)A contra asset until used.

Question

Quizplus · Accepted Answer

A future economic benefit is an asset because it is something that is expected to provide value to the entity in the future. Examples of future economic benefits include property, plant and equipment, investments, and accounts receivable. Revenue represents income earned by the entity from its operations, not a future economic benefit. A liability represents an obligation to transfer a future economic benefit to another party, not something owned or controlled by the entity. A contra asset is not an appropriate classification for a future economic benefit as it implies a reduction in the value of an existing asset, rather than a future benefit that has not yet been realized.

A Future Economic Benefit Owned or Controlled by an Entity