MC Question 6
The IASB’s Conceptual framework for financial reporting defines recognition as the process of incorporating in the
financial statements an item which meets the definition of an element and satisfies certain criteria.
Which of the following elements should be recognised in the financial statements of an entity in the manner
described?
| A | As a non-current liability: a provision for possible hurricane damage to property for a company located in an area |
|---|---|
| B | In equity: irredeemable preference shares |
| C | As a trade receivable: an amount of $10,000 due from a customer which has been sold (factored) to a finance |
| D | In revenue: the whole of the proceeds from the sale of an item of manufactured plant which has to be maintained |