In Accordance with the Conceptual Framework, Income Is Recognised in the Statement

question 26

Multiple Choice

In accordance with the conceptual framework, income is recognised in the statement of profit or loss and other comprehensive income when:

• A) an decrease in future economic benefits relating to an decrease in an asset or an increase in a liability can be measured reliably.
• B) an increase in future economic benefits relating to an increase in an asset or a decrease in a liability can be measured reliably.
• C) an increase in future economic benefits relating to an increase in an asset can be measured reliably.
• D) an increase in future economic benefits relating to an decrease in an asset or an increase in a liability can be measured reliably.

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Definitions:

Activity Cost Pools

Aggregations of all the overhead costs associated with specific activities, used in activity-based costing.

Customer Margin

The profit generated from a particular customer, calculated by subtracting the costs associated with serving that customer from the revenue they generate.

Serving Customers

The activities involved in providing products or services to customers effectively.

Activity Cost Pools

Accumulations of costs grouped by similar or related activities, used in activity-based costing to allocate costs more accurately.