Question 39 Information about income and expenses is Just as important as information about assets and liabilities. Not important. O Less important as information about assets and liabilities. O More important as information about assets and liabilities. Question 38 1 pts Which statement is incorrect regarding 'income' in accordance with the Conceptual Framework? O Revenue is normally reported net of the related expenses. Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. O Income encompasses both revenue and gains. O Income is recognized when increase in future economic benefits related to an increase in an asset or a decrease of a liability has arisen that can be measured reliably. Question 37 1 pt Which statement is incorrect regarding a liability? O A liability may arise from normal business practice, custom and a desire to maintain good business relations or act in an equitable manner. O A decision by the management of an entity to acquire assets in the future gives rise to a present obligation. O A liability may be legally enforceable as a consequence of a binding contract or statutory requirement. An essential characteristic of a liability is that the entity has a present obligation. Question 36 1 pts Which of the following is (are) essential to the existence of an asset? O Legal right O Physical form O Neither a norb Both a and b > Question 35 1 pts Which statement is incorrect regarding 'assets' in accordance with the Conceptual Framework? Assets are presented in the statement of financial position either as current or noncurrent. O Assets are required to be measured at fair value. Assets are recognized in the statement of financial position if it is probable that the future economic benefits will flow to the entity and the item has a cost or value that can be measured reliably. Assets are resources controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. Question 34 1 pts The new Conceptual Framework defines 'recognition' as The removal of a previously recognized asset or liability from an entity's statement of financial position, The process of incorporating in the balance sheet or income statement an item that meets the definition of an element and satisfies the criteria for recognition. The process of determining the monetary amounts at which the elements of the financial statements are to be recognized and carried in the balance sheet and income statement. The process of capturing for inclusion in the statement of financial position or the statement(s) of financial performance an item that meets the definition of an asset, a liability, equity, income or expenses. D Question 33 1 pts Which statement is incorrect regarding the elements of financial statements? The elements directly related to the measurement of financial position are assets, liabilities and equity. O None of the above. O The elements directly related to the measurement of financial performance are revenues and gains. O These are the grouping, into broad classes, of the financial effects of transactions and other events according to economic characteristics