Skip to content

CA Intermediate · Advanced Accounting · Framework for Preparation and Presentation of Financial Statements

Under the Framework, which of the following is an example of an item that satisfies the definition of an asset of Meera Exports Ltd. at the reporting date?

The debtor balance of Rs 2,00,000 for goods already delivered is an asset. It is a resource controlled by the company, arising from a past event, the sale, and it is expected to bring economic benefits through cash receipt. The other items lack control or a past event.

  1. AA skilled workforce trained by the company, which may leave at any time
  2. BA debtor balance of Rs 2,00,000 for goods already delivered, recoverable in 30 daysCorrect
  3. CA plan to buy machinery next year after board approval
  4. DA customer's verbal intent to place a large order next year

Explanation

An asset is a resource controlled by the entity as a result of past events from which future economic benefits are expected. The delivered-goods debtor meets this. A trained workforce is not controlled, and planned purchases or verbal intent do not arise from a past transaction giving control.

Did you get it right without looking?

One question tells you little. A timed set on Framework for Preparation and Presentation of Financial Statements shows your real accuracy, how long you take and where you lose marks.

Practise Framework for Preparation and Presentation of Financial StatementsFree diagnostic mock

More Framework for Preparation and Presentation of Financial Statements questions