Recognition criteria

[Acid]

Hi,

Can you please tell me what does point 3 on GTG Studytext page A3.6 means . i.e.
The elements are interrelated in such a manner that any transcations affects two or more elements . Hence any item that satisfies the definition and recognition criteria for a particular elemtn automatically requies the recognition of another element/s.

Can you explain me that point?

Thanks

Acid

[Vandana]

Hi there,

The elements are: assets, liabilities, income, expenses and equity. So therefore, if you record one element, eg a asset - let's say a receivable, (because you meet the criteria for recognition), by default you must recognise the other side of the entry, will will be one of the other elements, eg sales. Hope this makes sense!