Which of the Following Statements Is INCORRECT in Relation to the Recognition

question 6

Multiple Choice

Which of the following statements is INCORRECT in relation to the recognition criteria for elements of the financial statements?

• A) Assets are recognised when it is probable that future economic benefits will flow to the entity and the asset has a cost or value that can be measured reliably.
• B) Because equity is the arithmetic difference between assets and liabilities, a separate recognition criteria for equity is not needed in The Framework.
• C) Liabilities are recognised when it is probable that an outflow of resources embodying economic benefits will result from the settlement of a present obligation and the amount at which settlement will take place can be measured reliably.
• D) Income is recognised when an increase in future economic benefits related to a decrease in an asset or an increase in a liability that has arisen can be measured reliably.

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Definitions:

Persuasion

The process by which one person tries to change the belief, opinion, position, or course of action of another person through argument, pleading, or explanation.

Nonverbal Communication

The process of conveying a message without the use of words, which can include gestures, body language, facial expressions, and other visual cues.

Causal Analysis

The process of identifying and evaluating the factors that cause or contribute to a specific outcome or condition.

Attribution

The process of explaining one’s own behavior and the behavior of others.