Which of the following is true regarding income recognition?
A)The seller must have substantially performed its obligations to the customer (for example, by transferring ownership of goods to the customer).
B)The seller must have obtained an asset from the customer that it can reliably measure.If the asset is not cash, the seller must be reasonably certain of converting it into cash.
C)The firm recognizes expenses when it consumes assets.
D)If an event or transaction leads to the recognition of revenue, the firm matches the consumption of any assets (the expense), in time, with the revenue recognized.
E)all of the above

Question

Quizplus · Accepted Answer

All the statements provided are true regarding income recognition. A) outlines the performance obligation, B) discusses the measurement and certainty of the asset obtained, C) explains the recognition of expenses, and D) describes the matching principle, where expenses are matched with the revenues they help to generate.

Which of the Following Is True Regarding Income Recognition