The Statement That Is Not Correct Concerning the Definition of Expenses

question 16

Multiple Choice

The statement that is not correct concerning the definition of expenses in the Conceptual Framework is which of the following?

• A) An expense arises whenever the economic benefits in an asset are consumed or lost.
• B) The definition of expenses does not encompass items that have traditionally been reported in the financial statements as losses.
• C) An expense must result in a decrease in equity.
• D) The definition of expenses is expressed in terms of changes in assets, liabilities and equity.

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Definitions:

Issue Securities

The process by which corporations, governments, or other entities raise money by issuing stocks, bonds, or other financial instruments to investors.

Stock Prices

The current price at which a share of a company is traded on the stock market.

Company's Profits

The financial gain generated by a business, determined by subtracting total expenses from total revenue.

Market Interest Rates

The prevailing rates at which borrowers and lenders interact in the open market, influencing the cost of loans and the yield on savings.