According to the Conceptual Framework Which Statement Concerning the Recognition

question 53

Multiple Choice

According to the Conceptual Framework which statement concerning the recognition of liabilities is incorrect?

• A) A recognition criteria is that it is probable that a sacrifice of future economic benefits will be required.
• B) A recognition criteria is that the amount of the liability must be able to be measured reliably.
• C) All liabilities that meet the definition of a liability should be recognised in the accounting records.
• D) Liabilities that do not satisfy the recognition criteria can be recognised in the notes attached to the accounts.

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Definitions:

Time Tickets

The form on which the amount of time spent by each employee and the labor cost incurred for each individual job, or for factory overhead, are recorded.

Product Cost

Product cost is the total expense incurred to produce and deliver a good or service, including direct materials, direct labor, and manufacturing overhead.

Drill Bits

Cutting tools used to remove material to create holes, almost always of circular cross-section.

Plant Assembly

This refers to the process of constructing finished goods from raw materials in a manufacturing facility.