Which statement best explains the meaning of "recognition" in financial reporting?
A)Determining where items should be presented in the body of the financial statements.
B)Presenting an item in the financial statements, rather than simply disclosing in the notes.
C)Quantifying items so that they can be presented in the body of the financial statements.
D)Presenting expenses in the same accounting period as the related revenues.

Question

Quizplus · Accepted Answer

Recognition in financial reporting refers to the act of including an item in the financial statements, rather than simply disclosing it in the notes. This involves determining whether an item meets the criteria for recognition, such as being measurable and having a probable future economic benefit or cost. Once an item is recognized, it is included in the body of the financial statements.

Which Statement Best Explains the Meaning of "Recognition" in Financial