When is income considered to have been earned?
A)it is probable that any income owing will be received and any outstanding expenses, such as warranty claims, can be identified.
B)the activities necessary to generate the income are substantially complete.
C)the amount of income generated can be reliably measured.
D)all of the above.

Question

Quizplus · Accepted Answer

All of the above conditions need to be met for income to be considered earned. It must be probable that the income will be received, the activities necessary to generate the income must be substantially complete, and the amount of income generated must be reliably measured. Only when all of these conditions are met can income be recognized as earned.

When Is Income Considered to Have Been Earned