Under the Framework,which of These Is Not an Essential Characteristic

question 18

Multiple Choice

Under the Framework,which of these is not an essential characteristic of an expense?

• A) It must result in a decrease in equity
• B) It must represent a flow
• C) It must be associated with the earning of revenue
• D) It must take the form of a decrease in an asset or an increase in a liability

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Definitions:

Legal Capital

The minimum amount of capital that a corporation is required to maintain, as mandated by corporate laws, to protect creditors.

Dividends

Shareholders' receipts of payments from a corporation, generally tied to the distribution of earnings.

Incorporated

A legal process used to form a corporate entity or company, recognized separately from its owners with its own legal rights.

Capital Account

An account on a country's balance of payments that records all transactions involving the purchase or sale of assets.