Which of the following criteria, specified in the Conceptual Framework, must be met before a liability can be recognised in the accounting records?
I. The liability is beyond a reasonable doubt.
II. It is probable that the future sacrifices associated with the item will occur.
III. The liability has a cost or value that can be measured with reliability.

Question

Quizplus · Accepted Answer

According to the Conceptual Framework, in order to recognise a liability in accounting records, it must be probable that the future sacrifices associated with the item will occur (II) and the liability has a cost or value that can be measured with reliability (III). The concept of "beyond a reasonable doubt" (I) is not a relevant criterion in accounting, as it is not possible to completely eliminate all uncertainties or risks in business transactions. Therefore, the correct answer is B, which includes only criteria II and III.

Which of the Following Criteria, Specified in the Conceptual Framework