ACCA Applied Knowledge · Financial Accounting · The main elements of financial statements
Which of the following items would be recognised as income in the statement of profit or loss rather than as a gain on revaluation in other comprehensive income?
Revenue from goods delivered to a customer is income recognised in profit or loss. Land revaluation gains go to other comprehensive income, and contributions from owners are not income because they are equity transactions with owners.
- ARevenue from goods delivered to a customer during the yearCorrect
- BAn increase in the carrying amount of land under the revaluation model
- CA decrease in the carrying amount of land that has no previous revaluation surplus
- DOwners' contribution of additional share capital
Explanation
Revenue from goods delivered arises from ordinary activities and is recognised in profit or loss as income. A land revaluation increase goes to other comprehensive income. A first-time decrease would be an expense, and share capital contributions are not income at all but equity.
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