Identify the recognition criteria that must be satisfied under the Conceptual Framework for an expense to be included in the income report.
A) probability that the outflow of resources has occurred
B) outflow of resources able to be reliably measured
C) outflow of resources virtually certain
D) both A and B

Question

Quizplus · Accepted Answer

According to the Conceptual Framework, an expense should be recognized in the income statement if it meets the following criteria: (1) there is a probability that the outflow of resources has occurred, and (2) the outflow of resources can be reliably measured. Therefore, option D, which includes both criteria A and B, is the correct answer. Option C, while sounding similar to criterion A, is not an actual recognition criterion.

Identify the Recognition Criteria That Must Be Satisfied Under the Conceptual