Hi,

As for the question below, I choose answer B. However, system says it is A. But the solution looks like B. Does anyone has the same issue?

Under accounting principles generally accepted in the United States, in order for an item to qualify for recognition in the financial statements of a company, the item must

I. Be measurable in monetary terms

II. Reflect the consensus expectations of investors

III. Meet the definition of an element on the balance sheet


A.
I only [23%]

B.
I and III only [65%]

C.
I, II, and III [7%]

D.
II and III only [3%]
Explanation
Correct! In order for an item to qualify for recognition on the financial statements, it should meet the definition of an element of financial statements; be measurable with reasonable reliability; be relevant to users; and is based on information that is representationally faithful, verifiable, and neutral. It is not required to meet the consensus expectations of investors. An element of financial statements may be an element of the balance sheet or may be an element of the income statement.