If it is not probable that expenditure will generate future benefits,the accounting treatment should bE.
A) To treat it as a deferred asset.
B) To amortise it over a period of no more than two operating cycles.
C) To expense it.
D) To treat it as an unearned revenue.
E) None of the given answers.

Question

Quizplus · Accepted Answer

If it is not probable that expenditure will generate future benefits, it indicates that the expenditure has no economic value and will not produce any income or profits in the future. Therefore, it should be expensed immediately. This is in line with the matching principle in accounting, which requires that expenses should be recognized in the period in which the associated revenue is generated.

If It Is Not Probable That Expenditure Will Generate Future