Which of the Following Statements Regarding Chapter 4 - the Elements

question 40

Multiple Choice

Which of the following statements regarding Chapter 4 - The Elements of Financial Statements of the IASB's conceptual framework is false?

• A) The focus of the definitions of assets and liabilities moved to the existence of a right (or an obligation) that has the potential to produce (or require an entity to transfer) economic benefits.
• B) It requires that a present obligation be as a result of past events.
• C) It changes how an entity distinguishes between a liability and an equity instrument.
• D) It removes of the reference to the expected flow of economic benefits in defining assets and liabilities.

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Definitions:

Lockbox Plan

A banking service provided to companies for the receipt of payment from customers, utilizing a special address where payments are collected and processed quickly.

Net Operating Working Capital

A measure of a company's liquidity and refers to the difference between operating current assets and operating current liabilities.

Marketable Securities

Financial instruments that can be easily sold or converted into cash at a price close to their intrinsic value within a short period.

Net Present Value

A financial metric that calculates the value of projected cash flows over time by using a discount rate, showing the difference between the present value of cash inflows and outflows.