Asked by Jacob Cadavid on Jul 27, 2024
Verified
Property, plant and equipment includes items that:
A) have no physical substance.
B) are held for resale.
C) held for rental to others.
D) are expected to be used up within one year from date of purchase.
Physical Substance
The tangible, material aspect of an asset, referring to its physical existence and properties.
Rental
A payment made periodically by a lessee to a lessor for the use of a property, facility, equipment, or service.
- Acquire knowledge of the key principles concerning the accounting of property, plant, and equipment, which includes understanding the guidelines for their recognition, methods of measuring their value, and the requirements for their disclosure.
Verified Answer
VY
Vikas YadavJul 31, 2024
Final Answer :
C
Explanation :
Property, plant and equipment are long-term tangible assets that are used in the operations of a business and held for a period of time to generate revenue, rather than for resale or rental to others. Option A is incorrect because property, plant and equipment have physical substance. Option B is incorrect because items held for resale would typically be classified as inventory rather than property, plant and equipment. Option D is incorrect because assets expected to be used up within one year from date of purchase would typically be classified as a current asset rather than property, plant and equipment.
Learning Objectives
- Acquire knowledge of the key principles concerning the accounting of property, plant, and equipment, which includes understanding the guidelines for their recognition, methods of measuring their value, and the requirements for their disclosure.