The choice of classification between nature and function of expenses from ordinary activities depends on:
A) The size of the items that would be reported under the possible classifications.
B) The historical evidence about the probability of the items recurring.
C) The nature of the entity and historical and industry factors.
D) The classification that best reflects the way expenses vary directly or indirectly with the entity's level of activity.
E) None of the given answers.

Question

Quizplus · Accepted Answer

The choice of classification between nature and function of expenses from ordinary activities should depend on the nature of the entity and historical and industry factors. This will help to ensure that the expenses are accurately categorized based on the unique characteristics and circumstances of the entity.

The Choice of Classification Between Nature and Function of Expenses