Under the realisation convention, income is regarded as realised when:
A) the amount of income generated can be objectively determined.
B) there is reasonable certainty that any income owing will be received and any outstanding expenses, such as warrantee claims, can be identified.
C) the activities necessary to generate the income are substantially complete.
D) all of the above.

Question

Quizplus · Accepted Answer

All of the above conditions need to be met for income to be realised under the realisation convention. The objective determination of income, reasonable certainty of receipt, and completion of necessary activities are all factors that determine when income can be recorded in financial statements.

Under the Realisation Convention, Income Is Regarded as Realised When