Which of the following statements is/are FALSE: 1. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories; distribution & selling costs; administrative expenses; other operating expenses (or income). IV. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows. V. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset's useful life and increase the asset's capacity is capitalised. Select one: Oa 1, 11, IV Ob IV and V Oc 1 and 11 Od. II and II Oe. 1, 11, V

Which of the following statements is/are FALSE: 1. Because of the prudence convention, inventories are expensed in the income statement as cost of goods sold when they are sold, and not when they are bought in by the business and paid for. II. Investment property does not get depreciated, unless it is measured at cost. III. In the statement of comprehensive income, costs can be analysed according to function or nature. Costs analysed according to function are classified into the following categories; distribution & selling costs; administrative expenses; other operating expenses (or income). IV. A complete set of financial statements consists of the statement of financial position, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows. V. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this item that will extend the asset's useful life and increase the asset's capacity is capitalised. Select one: Oa 1, 11, IV Ob IV and V Oc 1 and 11 Od. II and II Oe. 1, 11, V

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4MC: Which of the following represents the components of the income statement for a service business...

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Question

Which of the following statements is/are FALSE:
1. Because of the prudence convention, inventories are expensed in the income statement as cost of
goods sold when they are sold, and not when they are bought in by the business and paid for.
II. Investment property does not get depreciated, unless it is measured at cost.
III. In the statement of comprehensive income, costs can be analysed according to function or nature.
Costs analysed according to function are classified into the following categories; distribution & selling
costs; administrative expenses; other operating expenses (or income).
IV. A complete set of financial statements consists of the statement of financial position, the statement of
comprehensive income, the statement of changes in equity and the statement of cash flows.
V. Following the acquisition of an item of property, plant and equipment, subsequent expenditure for this
item that will extend the asset's useful life and increase the asset's capacity is capitalised.
Select one:
Ⓒa 1, I, IV
Ob IV and V
Ocland 11
Od. II and Ill
e. 1, 1, V
8
Finisa
Time

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