Costs charged to profit as expenses are best defined as:
AEvery cash payment made to suppliers
BDividends paid out to the owners
CA liability rise from owner capital
DAsset falls or liability rises cutting equity
Answer & Solution
Correct answer: D. Asset falls or liability rises cutting equity
Expenses reduce equity through asset decreases or liability increases, while distributions to owners are not expenses.
Keep practising Conceptual Framework for Financial Reporting
Browse all Conceptual Framework for Financial Reporting questions for CA Final, or explore more Financialreporting topics.
Related questions
Ind AS 107 deals with disclosures relating to which subject?Once a company adopts Ind AS, voluntarily or mandatorily:Which body recommends Ind AS to the Ministry of Corporate Affairs?Equity rose from Rs 10,00,000 to 11,50,000; owners added 60,000, dividends 20,000. ComprehConsolidated statements show parent and subsidiaries as:A cash flow statement reports activities under which three heads?Which statement is a snapshot at one date?Foreseeable future for going concern is usually: