When Are Financial Items Recognized in the Financial Statements

question 38

Multiple Choice

When are financial items recognized in the financial statements?

• A)Items are recognized if the fair value amounts can be determined.
• B)Items are recognized if the inflows or outflows of resources are probable.
• C)Items are recognized if the future gains will result from disposal of the item.
• D)Items are recognized if there are no measurement uncertainties.

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Definitions:

Tax Rate

The specified rate at which a person’s or company’s income is taxed.

Variable Cost

Costs that are directly correlated with the amount of product produced.

Variable Cost Per Unit

Costs that change directly and proportionally with the level of production or sales volume.

Earnings Before Interest And Taxes

A measure of a firm's profitability that excludes interest and income tax expenses.