Which statement in relation to the treatment of expenses under AASB 101 is correct?
A) It is optional for an entity with revenue from the sale of goods to disclose cost of sales
B) Expenses should be classified according to their nature or their function
C) Expenses are defined exactly in accordance with the Framework
D) A and B are correct

Question

Quizplus · Accepted Answer

Under AASB 101, expenses should be classified according to their nature (e.g. cost of goods sold, salaries, rent) or their function (e.g. manufacturing, selling, administrative) in the financial statements. Option A is incorrect as it is mandatory for entities with revenue from the sale of goods to disclose cost of sales. Option C is also incorrect as expenses are not defined exactly in accordance with the Framework, but rather are defined based on their nature or function.

Which Statement in Relation to the Treatment of Expenses Under