Profit is calculated as the difference between income and expenses as defined by the AASB 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.
E) None of the given answers.

Question

Quizplus · Accepted Answer

Profit is calculated as the difference between income and expenses, which are influenced directly by the definitions and measurement rules for assets and liabilities. The matching principle is also important in calculating profit. However, there is no need for separate recognition criteria for profit as it is already captured within the recognition criteria for income and expenses. Therefore, option D is the correct answer.

Profit Is Calculated as the Difference Between Income and Expenses