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?

Possess physical substance (C) Signup and view all the answers

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

When the cost of the asset can be measured reliably and it is probable that the company will obtain future economic benefits (C) Signup and view all the answers

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

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

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

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

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

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. Signup and view all the answers

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

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

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

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