Profit is calculated as the difference between income and expenses as defined by the AASB 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 directly influenced by the definitions and measurement rules for assets and liabilities because they determine the amount of income and expenses. Additionally, there is no need for separate recognition criteria for profit as it is calculated from the recognition and measurement of assets and liabilities. The matching principle is important but not the only factor in calculating profit.

Profit Is Calculated as the Difference Between Income and Expenses