In establishing the classification of items in the income statement,the size of an item is an appropriate basis for establishing a separate classification (by nature or function)for it.

Question

Quizplus · Accepted Answer

The size of an item alone is not an appropriate basis for classification. Items must be classified based on their nature or function, which is determined by the economic substance of the item, not just its size or amount.

In Establishing the Classification of Items in the Income Statement,the