You are pleasantly surprised to discover that a popular actress appears on The Tonight Show wearing your company's jeans.Later,your company's sales increase by $500,000 as a result.When the actress appeared on TV,you would have recorded an asset because the TV appearance was expected to bring future economic benefits to your company.

Question

Quizplus · Accepted Answer

This activity is not a transaction because no assets or services were exchanged at the time the actress appeared on television.No asset would be recorded.In addition,recall that an asset is an economic resource presently controlled by the company;has measurable value and is expected to benefit the company by producing cash inflows or reducing cash outflows in the future.This situation does not meet the definition of an asset.

You Are Pleasantly Surprised to Discover That a Popular Actress