A business transaction has occurred when:
A)an event affects the entity's financial position.
B)the event can be reliably measured.
C)the accountant determines that the event is important enough to be a business transaction.
D)both A and B occur.

Question

Quizplus · Accepted Answer

A business transaction occurs when an event affects the entity's financial position and can be reliably measured. The accountant's determination of importance does not define whether a transaction has occurred, but rather whether it should be disclosed in the financial statements. Therefore, choice D is the correct answer.

A Business Transaction Has Occurred When