According to FASB Concept Statement No.5,Recognition and Measurement in Financial Statements of Business Enterprises,an expense is recognized when
A)the benefit of a liability has been reduced
B)an asset has been acquired
C)the benefit of an asset has been reduced
D)a liability has been incurred
E)the benefit of an asset has been acquired
F)both A and C
G)both C and D

Question

Quizplus · Accepted Answer

According to FASB Concept Statement No.5, an expense is recognized when the benefit of an asset has been reduced or a liability has been incurred. Therefore, both options C and D are correct. Option A is incorrect because it refers to the reduction of a liability, not the recognition of an expense. Option B and E are also incorrect because they refer to the acquisition of an asset, which is not related to the recognition of an expense. Option F combines options A and C, which are both correct, but it also includes an incorrect option. Therefore, the best answer is G.