Identify the recognition criteria that must be satisfied under the Conceptual Framework for income to be included in the profit report.
A) Probable that the inflow of resources has occurred.
B) Inflow of resources able to be reliably measured.
C) Income must be matched with expenses.
D) Both A and B.

Question

Quizplus · Accepted Answer

The two recognition criteria that must be satisfied under the Conceptual Framework for income to be included in the profit report are that it is probable that the inflow of resources has occurred and that the inflow of resources can be reliably measured. Choice D includes both criteria. Income matching with expenses is not a recognition criterion, but rather a principle of accrual accounting.

Identify the Recognition Criteria That Must Be Satisfied Under the Conceptual