CMA Intermediate · Corporate Accounting and Auditing · Conceptual Framework
The simultaneous recognition of income and related expenses is sometimes called matching of costs with income. Which statement matches the Conceptual Framework?
Matching is not an objective of the Conceptual Framework. Applying its concepts leads to matching when it results from recognising changes in assets and liabilities, but the framework does not aim at matching itself and does not allow balance sheet items that fail the definitions.
- AMatching of costs with income is a stated objective of the Conceptual Framework
- BMatching is not an objective, though the framework's concepts lead to it when it arises from recognising changes in assets and liabilitiesCorrect
- CMatching permits recognising in the balance sheet items that fail the definition of an asset
- DMatching applies only to sales made for cash
Explanation
The text states that applying the framework's concepts leads to matching when it arises from recognising changes in assets and liabilities, but matching is not an objective. Option A contradicts this. Option C is wrong because items not meeting the definitions cannot be recognised.
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