Which of the Following Statements Is Incorrect with Respect to AASB

question 48

Multiple Choice

Which of the following statements is incorrect with respect to AASB 110 "Events after the reporting date"?

• A) An entity shall adjust the amounts recognised in its financial statements to reflect adjusting events after the reporting date.
• B) If an entity declares dividends to holders of equity instruments after the reporting date, the entity shall not recognise those dividends as a liability at the reporting date.
• C) An entity may prepare its financial statements on a going concern basis if management determines after the reporting date that it intends to go on voluntary liquidation.
• D) An entity shall not adjust the amounts recognised in its financial statements to reflect non-adjusting events after the reporting date.
• E) An entity should disclose by way of a note to the financial statements adjusting events that cannot be quantified.

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Definitions:

Contribution Margin Ratio

The percentage of sales revenue that exceeds variable costs, indicating the portion available to cover fixed costs and generate profit.

Operating Income

Income generated from a company's ongoing, core business operations, excluding deductions of interest and taxes.

Variable Costs

Costs that vary directly with the level of production or business activity.

Income From Operations

Income From Operations is the profit realized from a business's operational activities, excluding any investment income or taxes.