Test your understanding 2
•
Land and buildings –
non-current asset
.
•
Receivables
–
current asset
.
•
Cash
–
current asset
.
•
Loan repayable in two years' time –
non-current liability
.
•
Payables
–
current liability
.
•
Delivery
van
–
non-current asset
.
Test your understanding 3
The correct answer is C
Both tangible and intangible assets may be recognised as long as they
meet the definition of an asset as described earlier.
Faithful representation includes the concept that transactions should
reflect their economic substance, rather than the legal form of the
transaction.
Businesses should report all transactions, events and balances in their
financial statements. Materiality is simply a measure for determining how
significant that information is to users.
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