In which of the following transactions would it not be appropriate to recognize an asset in the financial statements?
A)SGG receives a firm commitment from another company to purchase goods from SGG.
B)SGG pays $10,000 to a lawyer for services to be provided next year.
C)SGG provides services to another company, but will not be paid until after year end.
D)A customer of SGG makes a deposit of $1,500 for goods to be custom-made.

Question

Quizplus · Accepted Answer

A firm commitment from another company to purchase goods does not meet the definition of an asset because it does not represent a resource controlled by the entity as a result of past events from which future economic benefits are expected to flow to the entity.

In Which of the Following Transactions Would It Not Be