Property
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Questions and Answers

Which of the following terms is commonly used as a synonym for property, plant, and equipment?

  • Intangible assets
  • Plant assets (correct)
  • Financial assets
  • Current assets

    • What does historical cost measure when acquiring property, plant, and equipment?

  • The expected future economic benefits of the asset
  • The salvage value of the asset
  • The market value of the asset at the time of acquisition
  • The cash or cash equivalent price of obtaining the asset and bringing it to the location and condition (correct)

    • What type of assets are property, plant, and equipment?

  • Short-term assets
  • Intangible assets
  • Assets intended for resale
  • Assets of a durable nature used in operations (correct)

    • What is a key characteristic of property, plant, and equipment?

    <p>Possess physical substance</p> Signup and view all the answers

    When do companies recognize property, plant, and equipment as assets?

    <p>When the cost of the asset can be measured reliably and it is probable that the company will obtain future economic benefits</p> Signup and view all the answers

    What are property, plant, and equipment and what are some other commonly used terms for them?

    <p>Property, plant, and equipment are assets of a durable nature. Other terms commonly used are plant assets and fixed assets.</p> Signup and view all the answers

    What are some examples of property, plant, and equipment?

    <p>Examples include land, building structures (offices, factories, warehouses), and equipment (machinery, furniture, tools).</p> Signup and view all the answers

    When do companies recognize property, plant, and equipment as assets?

    <p>Companies recognize property, plant, and equipment when the cost of the asset can be measured reliably and it is probable that the company will obtain future economic benefits.</p> Signup and view all the answers

    What does historical cost measure when acquiring property, plant, and equipment?

    <p>Historical cost measures the cash or cash equivalent price of obtaining the asset and bringing it to the location and condition.</p> Signup and view all the answers

    What are the key characteristics of property, plant, and equipment?

    <p>Property, plant, and equipment are assets of a durable nature, possess physical substance, and are used in operations rather than for resale.</p> Signup and view all the answers

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