Expenses Are Recognised in the Statement of Profit or Loss

question 2

Multiple Choice

Expenses are recognised in the statement of profit or loss and other comprehensive income when:

• A) increase in future economic benefits related to a increase in an asset or an increase in a liability can be measured reliably.
• B) a decrease in future economic benefits related to a decrease in an asset or an increase in a liability can be measured reliably.
• C) a decrease in future economic benefits related to a decrease in an asset or a decrease in a liability can be measured reliably.
• D) none of the options are correct.

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Definitions:

Flotation Costs

Flotation costs are the expenses incurred by a company in issuing new securities, including underwriting fees, legal fees, and registration fees.

Dividend Policy

A dividend policy is a company's approach to distributing profits back to its shareholders, either in the form of cash dividends or stock dividends.

New Shares

These are additional shares of stock issued by a company, expanding the total number of shares on the market and diluting existing shareholders' ownership unless they purchase more.

Shareholders of Record

Individuals or entities that are officially registered and listed as the owners of shares in a company as of the record date.