Ch. 1 - Basics

Question 1

Criteria for an asset

Answer 1

1. It is probable that economic benefits will flow to the entity
2. it is controlled by the entity
3. A reliable estimate can be made

Question 2

Criteria for a liability

Answer 2

1. There is a present obligation as a result of past events
2. It is probable there will be an economic outflow of economic resources
3. A reliable estimate can be made of the obligation