The Pattern of Revenue Recognition Required by AASB 1023 Is

question 22

Multiple Choice

The pattern of revenue recognition required by AASB 1023 is:

• A) As premiums become due and payable, the revenue should be recognised according to accrual principles.
• B) In accordance with the pattern of past receipts from policies of a similar type.
• C) Based on the discounted cash flows expected to be associated with the policy, using past experience of policies that are in the same category.
• D) Based on the pattern of the incidence of risk to which the insurer is exposed.

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Definitions:

Total Liabilities

The sum of all financial obligations (debts and other liabilities) a company owes to outside parties.

Pro Forma Net Income

An estimate of a company's net income excluding non-recurring items, projecting future earnings based on certain assumptions or adjustments.

Profit Margin

A profitability ratio calculated as net income divided by revenue, showing the percentage of revenue that remains as profit after expenses.

Sales Increase

Refers to the rise in the amount of goods or services sold by a company over a specific period, showcasing business growth.