According to the Conceptual Framework which statement concerning the recognition of liabilities is incorrect?
A) A recognition criteria is that it is probable that a sacrifice of future economic benefits will be required.
B) A recognition criteria is that the amount of the liability must be able to be measured reliably.
C) All liabilities that meet the definition of a liability should be recognised in the accounting records.
D) Liabilities that do not satisfy the recognition criteria can be recognised in the notes attached to the accounts.

Question

Quizplus · Accepted Answer

The statement C is incorrect because not all liabilities that meet the definition of a liability are recognized in the accounting records. Recognition depends on the satisfaction of certain criteria, such as the probability of an outflow of resources and the reliability of measurement, not merely on meeting the definition of a liability.

According to the Conceptual Framework Which Statement Concerning the Recognition