Profit is calculated as the difference between income and expenses as defined by the IASB Conceptual Framework.As a result:
A)The matching principle is of prime importance in calculating profit.
B)Profit is influenced directly by the definitions and measurement rules for assets and liabilities.
C)There is no need for separate recognition criteria for profit.
D)Profit is influenced directly by the definitions and measurement rules for assets and liabilities and there is no need for separate recognition criteria for profit.

Question

Quizplus · Accepted Answer

Profit is calculated as the difference between income and expenses, therefore it is directly influenced by the definitions and measurement rules for assets and liabilities. In addition, there is no need for separate recognition criteria for profit as it is already a result of recognizing income and expenses. The matching principle is important in determining the amount of income and expenses to be recognized, but it is not a separate recognition criteria for profit.

Profit Is Calculated as the Difference Between Income and Expenses