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 choices are required for income to be considered earned. The company must have substantially completed the activities necessary to generate the income, it must be probable that any income owing will be received, and the amount of income generated must be reliably measured. Additionally, any outstanding expenses, such as warranty claims, must be identified.

When Is Income Considered to Have Been Earned