The Framework Adopts Which Approach to Determining Profits

question 4

Multiple Choice

The Framework adopts which approach to determining profits.

• A)Revenue/expense approach.
• B)Matching principle approach.
• C)Asset/liability approach.
• D)Cash basis approach.
• E)None of the given answers

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Definitions:

Purchase Shares

The act of buying ownership units in a company, often done through a stock exchange, to potentially earn dividends or sell at a higher price in the future.

Selling A Call Option

The action of granting someone the right, but not the obligation, to buy a specific amount of the underlying asset at a set price within a specified time frame.

Obligation To Sell

A commitment or requirement to sell an asset or security, often arising from a contractual agreement.

Protective Put

An investment strategy where an investor buys a put option for an asset they own to hedge (protect) against a potential drop in the asset's price.