Identify the Recognition Criteria That Must Be Satisfied Under the Conceptual

question 33

Multiple Choice

Identify the recognition criteria that must be satisfied under the Conceptual Framework for income to be included in the profit report.

• A) probability that the inflow of resources has occurred
• B) inflow of resources able to be reliably measured
• C) income must be matched with expenses
• D) both A and B

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Definitions:

Activity-based Costing

A costing methodology that assigns overhead and indirect costs to related products and services based on their consumption of resources.

Volume-based Costing

A costing method that allocates overhead expenses based on the volume of goods produced or services provided.

Quantitative Analysis

The use of mathematical and statistical methods to evaluate financial and operational information for decision-making.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and therefore should not influence future business decisions.