Identify the recognition criteria that must be satisfied under the Conceptual Framework for an expense to be included in the income statement.
A) Probable 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

The recognition criteria for an expense under the Conceptual Framework are that it is probable that the outflow of resources has occurred and that the outflow of resources can be reliably measured. Therefore, both option A and B must be satisfied for an expense to be included in the income statement. Option C, which states that the outflow of resources is virtually certain, is not a recognized criterion under the Conceptual Framework.

Identify the Recognition Criteria That Must Be Satisfied Under the Conceptual