Question

6. Which one of the following statements about income is correct?

Group of answer choices

Income can be in the form of decreases of liabilities.

Increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims.

Income may arise when there is control over the increase in economic benefits.

Income may arise from the recognition of an increase in the value of assets.

Answer 1

All of the statements are correct as explained below:

• As per conceptual framework of IFRS, decrease in liabilities is directly associated with increase in income.
• As per element of conceptual framework definition of IFRS, option B is also correct.
• Increase in economic benefits and control over them is directly propotional to increase in income. Thus option C is also correct.
• Increase in assets (such as cash) or decrease in liability ( such as liability paid out by buyer) are directly associated with income.

Hope this helps !!