Profit Is Calculated as the Difference Between Income and Expenses

question 64

Multiple Choice

Profit is calculated as the difference between income and expenses as defined by the AASB 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:

Core Principles

Fundamental beliefs or values that serve as the foundation for a system, organization, or individual's actions and decision-making processes.

Personal Character

Personal character refers to the combination of traits and qualities defining an individual's ethical, moral, and personal identity.

Principled Moral Level

Refers to a stage of ethical development at which individuals make decisions based on universal ethical principles, prioritizing justice and rights.