An asset must be _______ by the business to be shown as an asset in its "balance sheet"
Correct answer: C. Controlled
- A. Possessed
- B. Owned
- C. Controlled
- D. Used
Explanation
Accounting recognises an asset when the business controls the resource and can obtain its future economic benefits, even if it does not legally own it. This is why control is broader and more accurate than ownership.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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