Which statement is not correct about expenses on the income statement?
A)Classifying expenses by function means that expenses are reported according to the activity for which they are incurred.
B)Examples of expenses classified by nature are salaries and depreciation.
C)Companies following ASPE do not have to list their expenses in any particular order.
D)Expenses must be classified in decreasing order of magnitude.

Question

Quizplus · Accepted Answer

Expenses are not required to be classified in any particular order, either increasing or decreasing. However, it is common practice to present expenses in decreasing order of magnitude to provide useful information to users of the financial statements.

Which Statement Is Not Correct About Expenses on the Income