Which of the following is one of the conditions for recognition of an expense?
A)There is a reasonable expectation that cash will be received.
B)The expense can be recognized only when cash is paid.
C)The goods will be delivered or the services will be provided within the accounting cycle.
D)The goods or services are used to produce revenue.

Question

Quizplus · Accepted Answer

An expense can be recognized only if the goods or services are used to produce revenue. This means that the expense is related to the generation of revenue and is necessary for the operation of the business. The other options are not conditions for recognizing an expense. The expectation of cash receipt (Option A) is not relevant for recognizing expenses, as expenses are recognized when they are incurred, regardless of when cash is received. Option B is incorrect because expenses are recognized when they are incurred, not when cash is paid. Option C is incorrect because the delivery of goods or services is not a condition for recognizing expenses; the incurrence of the expense is.

Which of the Following Is One of the Conditions for Recognition