Profit Is Calculated as the Difference Between Income and Expenses

question 44

Multiple Choice

Profit is calculated as the difference between income and expenses as defined by the IASB Conceptual Framework.As a result:

• A)The matching principle is of prime importance in calculating profit.
• B)Profit is influenced directly by the definitions and measurement rules for assets and liabilities.
• C)There is no need for separate recognition criteria for profit.
• D)Profit is influenced directly by the definitions and measurement rules for assets and liabilities and there is no need for separate recognition criteria for profit.

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Definitions:

Indifference Curve

A graph representing combinations of two goods or services among which a consumer is indifferent, showing preferences.

Total Utility

The complete satisfaction or pleasure a consumer derives from consuming a certain quantity of goods or services.

Indifference Curve

A graph showing different combinations of two goods between which a consumer is indifferent, representing equivalent levels of utility.

Bundles

Combinations of goods or services that are purchased together.