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CMA Intermediate · Corporate Accounting and Auditing · Conceptual Framework

Under the Conceptual Framework for Financial Reporting under Ind AS, which pair of elements of financial statements relates to a reporting entity's financial performance?

Income and expenses are the elements that relate to financial performance. Assets, liabilities and equity relate to financial position. The Conceptual Framework therefore splits the five elements into a position group and a performance group, and only income and expenses belong to performance.

  1. AAssets and liabilities
  2. BIncome and expensesCorrect
  3. CLiabilities and equity
  4. DAssets and equity

Explanation

Paragraph 4.1 groups the elements into two sets. Assets, liabilities and equity relate to financial position, while income and expenses relate to financial performance. The other options pair elements of financial position, so they are wrong.

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