AASB 137 Requires Provisions to Be Recognised When: I There

question 9

Multiple Choice

AASB 137 requires provisions to be recognised when: I there has been a past event.
II an entity has a present obligation.
III the amount of the obligation can be reliably estimated.
IV it is possible that an outflow of resources will be required to settle the obligation.

• A) I, II and III.
• B) II, III and IV.
• C) I, III and IV.
• D) I, II and IV.

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Definitions:

Perfect Competitor

A firm in a perfectly competitive market, having no control over market price and where goods offered are perfect substitutes.

Differentiated Product

A product that has been designed or marketed to stand out from similar products offered by competitors.

Elastic

Refers to the responsiveness of the quantity demanded or supplied of a good or service to a change in its price.

Demand Curve

A graphical representation showing the relationship between the price of a good and the quantity of that good consumers are willing to buy at various prices.