(Explain whether and why an expenditure is an asset, LO 3) For each of the following, explain whether and why each would be considered:

a. An asset by a non-accountant (use your intuition and judgment to decide whether the item in question should be considered an asset).

b. An asset according to GAAP (use the GAAP criteria that were discussed in the chapter).

i. An auto parts manufacturer spends $200,000 to clear land to prepare it for construction of a new factory.

ii. A company that operates call centres spends over $1 million per year providing training for staff so that they can provide informed and courteous service to people contacted.

iii. A metal fabricating shop is owed $25,000 by one of its customers. The customer recently filed for bankruptcy because it was unable to pay its debts.

iv. A popular newsmagazine has a list of current and past subscribers.

v. A major news organization has an internationally renowned team of journalists and broadcasters.