In accordance with AASB framework which of the following is consistent with the definition of expenses?
A)Expenses are decreases in economic benefits during the accounting period in the form of outflows other than those relating to distributions to equity participants.
B)Expenses are increases in economic benefits during the accounting period in the form of inflows or enhancement of assets or incurrences of liabilities that result in decreases in equity,other than those relating to distributions to equity participants.
C)Expenses are decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity,other than those relating to distributions to equity participants.
D)All of the given answers.
E)None of the given answers.

Question

Quizplus · Accepted Answer

3. Expenses are decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.
According to the Australian Accounting Standards Board (AASB) framework, expenses are defined as decreases in economic benefits during the accounting period. This can occur through various means such as the outflow or consumption of assets or the incurrence of liabilities. The key aspect of expenses is that they result in a decrease in equity, but this does not include distributions to equity participants, such as dividends paid to shareholders.
Option 1 is incorrect because it only mentions outflows and does not include the depletion of assets or the incurrence of liabilities.
Option 2 is incorrect because it describes increases in economic benefits, which is more aligned with the definition of income rather than expenses.
Option 4 is incorrect because not all the given answers are consistent with the definition of expenses as per the AASB framework.
Option 5 is incorrect because one of the given answers (option 3) is consistent with the definition of expenses.
Therefore, the answer that aligns with the AASB's definition of expenses is option 3.

In Accordance with AASB Framework Which of the Following Is