Question

Recognition guidance within a topic tells you:

A. Whether the guidance in this topic applies to a transaction.
B. How much (at what value) an item should be recorded.
C. How a transaction should be presented in the financial statements.
D. What, when, and how to record an item.

Answer 1

Recognition guidance within a topic tells you what, when, and how to record an item. It provides specific instructions on the recognition of transactions in financial statements.

Step-by-step explanation:

The correct answer is D. What, when, and how to record an item.

Recognition guidance within a topic tells you what, when, and how to record an item. It provides specific instructions on the recognition of transactions in financial statements. This includes determining when to recognize revenue or expenses, how to measure the value of an item, and how to present it in the financial statements.

For example, recognition guidance in accounting may specify that revenue from the sale of goods should be recognized when the goods are delivered to the customer, and should be recorded at the amount expected to be received from the customer. It may also guide how to record expenses such as depreciation or impairment.