Which of the Following Criteria Must Be Met Before an Event

question 115

Multiple Choice

Which of the following criteria must be met before an event or item should be recorded for accounting purposes?

• A) The event or item can be measured objectively in financial terms.
• B) The event or item is relevant and reliable.
• C) The event or item is an element.
• D) All of these must be met.

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Definitions:

Operating Activities

Transactions and other events that enter into the determination of net income, including all activities not classified as investing or financing activities in cash flow analysis.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Investing Activity

Transactions that involve purchasing or selling long-term assets and investments, which are reported in the investing section of a company's cash flow statement.

Equipment Sale

The process or transaction that involves selling machinery or technical gear used in manufacturing or operation.