Under the AASB Framework Income Is Now Subdivided Into

question 50

Multiple Choice

Under the AASB Framework income is now subdivided into:

• A) Revenues, which only include sales, fees, interest, dividends, royalties and rent; Gains, which are no different in nature to revenue.
• B) Gains, which are regarded as constituting a separate element in the Framework; Revenues, which may only arise in the course of the ordinary activities of the entity.
• C) Revenues, which arise in the course of the ordinary activities of the entity; Gains, which may or may not arise in the course of the ordinary activities of the entity.
• D) Increases in equity referred to as Gains; reductions in liabilities which are classified as Revenues.
• E) None of the given answers.

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Definitions:

Allocation Base

A measure or quantity, such as labor hours or machine hours, used to assign costs to activities or objects.

Machine Hours

A measure of the total time machines are operational within a specific period, often used in activity-based costing or allocation.

Factory Overhead Rate

A calculation used to allocate manufacturing overhead costs to individual units of production, based on a certain base such as labor hours or machine hours.

Machine Hours

A measure of production time, tracking the total hours that machinery is in operation during the manufacturing process.