As well as expenses that arise in the ordinary activities of a business,which of the following is recognised as an expense of a company?
A)Losses
B)Dividends
C)Gains
D)Transfers out of retained earnings

Question

Quizplus · Accepted Answer

Losses are recognized as expenses of a company because they represent a decrease in the value of assets or an increase in liabilities that are incurred in the ordinary course of business. Dividends are distributions of profits to shareholders and are not considered expenses. Gains are increases in the value of assets and are not recognized as expenses. Transfers out of retained earnings are not expenses, but rather a reduction in retained earnings that result from the appropriation of profits for a specific purpose.

As Well as Expenses That Arise in the Ordinary Activities