PRC-1 · Chapter 1 · Question 59 of 100
If a business acquires a machine on a long-term lease and records it as an asset despite not holding the legal title, it is applying which accounting concept?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Substance over form
Explanation
The 'substance over form' concept emphasizes the economic reality of a transaction (e.g., controlling the use of an asset) over its strict legal form (e.g., holding the legal ownership title).
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