{"id":51761,"date":"2024-04-15T23:29:27","date_gmt":"2024-04-15T23:29:27","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=51761"},"modified":"2024-04-15T23:29:27","modified_gmt":"2024-04-15T23:29:27","slug":"when-the-sale-is-expected-to-occur-beyond-one-year-the-entity-shall-measure-the-costs-to-sell-at-their-present-value-any-increase-in-the-present-value-of-the-costs-to-sell-that-arises-from-the-passa","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/when-the-sale-is-expected-to-occur-beyond-one-year-the-entity-shall-measure-the-costs-to-sell-at-their-present-value-any-increase-in-the-present-value-of-the-costs-to-sell-that-arises-from-the-passa\/","title":{"rendered":"When the sale is expected to occur beyond one year, the entity shall measure the costs to sell at their present value. Any increase in the present value of the costs to sell that arises from the passage oftime shall be presented in"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;Capital Reserve A\/c&#8221; option2=&#8221;Profit or loss as a financing cost&#8221; option3=&#8221;General Reserve A\/c&#8221; option4=&#8221;None of the above&#8221; correct=&#8221;option2&#8243;]<!--more--><\/p>\n<p>The correct answer is: <strong>B. Profit or loss as a financing cost<\/strong><\/p>\n<p>The costs to sell are the incremental costs directly attributable to the disposal of an asset, excluding finance costs. When the sale is expected to occur beyond one year, the entity shall measure the costs to sell at their present value. Any increase in the present value of the costs to sell that arises from the passage of time shall be presented in profit or loss as a financing cost.<\/p>\n<hr \/>\n<p><strong>Explanation of each option:<\/strong><\/p>\n<ul>\n<li><strong>A. Capital Reserve A\/c<\/strong><\/li>\n<\/ul>\n<p>A capital reserve is a reserve that is created when an entity receives a capital contribution from its owners. It is not used to offset expenses or losses, but rather to increase the entity&#8217;s equity.<\/p>\n<ul>\n<li><strong>B. Profit or loss as a financing cost<\/strong><\/li>\n<\/ul>\n<p>A financing cost is an expense that is incurred by an entity in connection with the raising of finance. It includes interest expense, debt issue costs, and finance lease payments.<\/p>\n<ul>\n<li><strong>C. General Reserve A\/c<\/strong><\/li>\n<\/ul>\n<p>A general reserve is a reserve that is created by an entity to meet any unforeseen circumstances. It is not used to offset expenses or losses, but rather to provide a buffer against unexpected events.<\/p>\n<ul>\n<li><strong>D. None of the above<\/strong><\/li>\n<\/ul>\n<p>This option is not correct because the increase in the present value of the costs to sell that arises from the passage of time shall be presented in profit or loss as a financing cost.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;Capital Reserve A\/c&#8221; option2=&#8221;Profit or loss as a financing cost&#8221; option3=&#8221;General Reserve A\/c&#8221; option4=&#8221;None of the above&#8221; correct=&#8221;option2&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-51761","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>When the sale is expected to occur beyond one year, the entity shall measure the costs to sell at their present value. 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Any increase in the present value of the costs to sell that arises from the passage oftime shall be presented in\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;Capital Reserve A\/c&#8221; option2=&#8221;Profit or loss as a financing cost&#8221; option3=&#8221;General Reserve A\/c&#8221; option4=&#8221;None of the above&#8221; correct=&#8221;option2&#8243;]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/exam.pscnotes.com\/mcq\/when-the-sale-is-expected-to-occur-beyond-one-year-the-entity-shall-measure-the-costs-to-sell-at-their-present-value-any-increase-in-the-present-value-of-the-costs-to-sell-that-arises-from-the-passa\/\" \/>\n<meta property=\"og:site_name\" content=\"MCQ and Quiz for Exams\" \/>\n<meta property=\"article:published_time\" content=\"2024-04-15T23:29:27+00:00\" \/>\n<meta name=\"author\" content=\"rawan239\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"rawan239\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<!-- \/ Yoast SEO Premium plugin. -->","yoast_head_json":{"title":"When the sale is expected to occur beyond one year, the entity shall measure the costs to sell at their present value. 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