Which Statement Best Explains the Meaning of "Recognition" in Financial

question 9

Multiple Choice

Which statement best explains the meaning of "recognition" in financial reporting?

• A)Determining where items should be presented in the body of the financial statements.
• B)Presenting an item in the financial statements, rather than simply disclosing in the notes.
• C)Quantifying items so that they can be presented in the body of the financial statements.
• D)Presenting expenses in the same accounting period as the related revenues.

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Definitions:

Probability

A measure of the likelihood that an event will occur, often quantified as a number between 0 and 1.

Relative Frequency

The ratio of the number of times a value occurs compared to the total number of observations.

New Supermarket

A recently established retail store that specializes in selling a wide range of foods and household products.

New York Market

Refers to the financial markets based in New York City, which include the New York Stock Exchange among others, and are central to global finance.