In Relation to the Recognition and Realisation of Income, the Statement

question 39

Multiple Choice

In relation to the recognition and realisation of income, the statement that is correct is:

• A) Recognition of income means including it in the income report as part of the profit calculation.
• B) The realisation convention has replaced the income recognition criteria contained in the Conceptual Framework.
• C) Income from a credit sale is normally recognised in the income statement when the cash is received.
• D) All of the statements are correct.

---

Definitions:

Manufacturing Equipment

Manufacturing equipment refers to the machinery and tools used in the process of producing goods or handling materials.

Labour And Materials

The costs associated with the workforce (labour) and the raw materials used in the production of goods and services.

Tax Rate

The percentage at which an individual or corporation is taxed by the government, varying based on income or profit levels.

Present Value CCA Tax Shield (PVCCATS)

The present value of potential tax savings obtained from the capital cost allowance on depreciable assets, discounted back to the present.