Which Statement Is Not Correct About Expenses on the Income

question 78

Multiple Choice

Which statement is not correct about expenses on the income statement?

• A)Classifying expenses by function means that expenses are reported according to the activity for which they are incurred.
• B)Examples of expenses classified by nature are salaries and depreciation.
• C)Companies following ASPE do not have to list their expenses in any particular order.
• D)Expenses must be classified in decreasing order of magnitude.

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Definitions:

Remote

Referring to work, operations, or processes conducted away from a central office or location, often facilitated by digital communication technology.

Contingent Liability

A potential financial obligation that may arise in the future, dependent on the outcome of a specific event.

Reasonably Estimable

A term used in accounting to describe a cost or liability that can be accurately predicted or projected.

Contingent Liability

A potential financial obligation depending on the outcome of future events, not yet confirmed as a liability.