Which of the following is an example of an expenditure that could be recognised as either an immediate asset or an expense?
A)Purchase of a new plant (factory)
B)Purchase of a 12 month insurance policy
C)Payment of an account payable
D)Payment of wages

Question

Quizplus · Accepted Answer

The purchase of a 12 month insurance policy could be recognized as an immediate asset if the insurance policy covers a long-term asset or liability, such as a building or loan. Alternatively, it could be recognized as an expense if the insurance policy covers short-term expenses, such as liability insurance or employee health insurance. The other options listed (A, C, and D) are all examples of expenditures that would typically be recognized as assets or expenses depending on their nature and intended use.

Which of the Following Is an Example of an Expenditure