The recognition criteria that must be satisfied under the Conceptual Framework for an expense to be included in the income statement is:
A)probable that the outflow of resources has occurred.
B)outflow of resources able to be reliably measured.
C)outflow of resources virtually certain.
D)Both A and B.

Question

Quizplus · Accepted Answer

According to the Conceptual Framework, an expense should only be recognized in the income statement when it meets two criteria: (1) it is probable that an outflow of resources has occurred, and (2) the outflow of resources can be reliably measured. Therefore, only choices A and B are correct, and the answer is D (Both A and B).

The Recognition Criteria That Must Be Satisfied Under the Conceptual