Which of the Following Statements Concerning the Definition of Expenses

question 11

Multiple Choice

Which of the following statements concerning the definition of expenses in the Conceptual Framework is incorrect?

• A) An expense arises whenever the economic benefits in an asset are consumed or lost.
• B) All expenses must be matched with their associated income in the same financial period.
• C) An expense occurs simultaneously with a decrease in an asset or an increase in a liability.
• D) An expense is recognised when the decrease in future economic benefits can be measured reliably.

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Definitions:

Stock Split

A corporate action to increase the number of shares by dividing each share, which decreases its price and makes it more accessible to investors without changing the market capitalization.

Market Value

The ongoing cost at which a commodity or service is available for buying or selling in the market.

Shares Outstanding

The total number of a company's shares that are currently held by all its shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.

Par Value

The face value of a bond or stock as stated by the issuing company, which does not necessarily reflect market value.