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

question 19

Multiple Choice

Which of the following statements is correct in relation to the recognition of expenses?

• A)Under the Conceptual Framework the recognition of expenses is not tied to the matching process.Therefore the matching process no longer has any influence in practice
• B)The recognition of expenses is not subject to the same degree of regulation as revenue
• C)Under the Conceptual Framework the use of the matching process in relation to the recognition of expenses is acceptable,but must be discarded if it creates dubious assets and liabilities
• D)Individual accounting standards may be consulted to determine the appropriate treatment for particular types of expenses.

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Definitions:

Economy Regulation

The imposition of rules by the government intended to modify the economic behavior of individuals, firms, or industries to achieve policy outcomes.

Unfunded Liability

A financial obligation or promised benefit for which sufficient funds have not been set aside, often relating to pensions or other post-employment benefits.

U.S. Federal Government

The national government of the United States, consisting of three branches: legislative, executive, and judicial.

Medicare

A federal program that provides for (1) compulsory hospital insurance for senior citizens, (2) low-cost voluntary insurance to help older Americans pay physicians’ fees, and (3) subsidized insurance to buy prescription drugs. Financed by payroll taxes.