menu
Sign up

A Company Incurs Significant Costs in Relation to a Speculative

Question 9
Multiple Choice

A company incurs significant costs in relation to a speculative mining project that intends to turn rocks into gold.In accordance with the AASB's Conceptual Framework,the costs of this project would be an: A)expense because there is little probability that future economic benefits will eventuate. B)expense because the recognition criteria for an asset is not satisfied. C)asset because the definition and recognition criteria for assets are satisfied. D)asset because the company will control the future economic benefits.

Related questions
Q 10
According to AASB 111 Construction Contracts,revenue and expenses relating to long-term construction contracts are recognised on the basis of the: A)effective interest method. B)discounted cash flows method. C)receipt of cash flows. D)percentage of completion method.
Q 11
Which of the following statements is correct in relation to the recognition of expenses? A)Under the Conceptual Framework,the recognition of expenses is based on the matching process. B)The recognition of expenses is not subject to the same degree of regulation as revenue. C)Under the Conceptual Framework,recognition of expenses is not tied to the matching process. D)Individual accounting standards do not need to be consulted to determine the appropriate treatment for particular types of expenses.
Q 12
According to AASB 101,an entity will classify a liability as current when: A)it expects to settle the liability outside its normal operating cycle. B)it expects to settle the liability within its normal operating cycle. C)the entity has an unconditional right to defer the settlement of the liability for at least 12 months after the reporting date. D)the liability is due to be settled more than 12 months after the reporting date.
logo
© 2020 QuizPlus. All Right Reserved