(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. A large grocery store purchases land adjacent to the store for $300,000 so that it can expand its parking lot.

ii. A student has paid university tuition totalling $15,000 to study business.

The student plans to become a professional accountant in two years and hopes to open his own accounting practice within five years.

ii. A trucking company regularly changes the oil in its trucks to ensure that they operate efficiently and that they last their full expected lives.

iv. A fast food chain’s brand name is known around the world. The chain has invested heavily over the years in making its restaurants popular for people by advertising its food and restaurants.

v. A major retailer repeatedly is found to have the most satisfied customers in its industry in surveys conducted by independent market research companies.