Week 10 (Accounting for equity)

Question 1

Components of income

Answer 1

Revenue:
Arises from ordinary activities of a business

Gains:
Other income
- disposal of a non-current asset: Realised
- asset revuluation surplus: Unrealised

Question 2

Components of expense

Answer 2

Expenses:
Arises from ordinary activity

Losses:
Meets the expense definition but does not arise from ordinary activities

• Realised: losses from disasters such as flood or fire
• Unrealised: provisions, revuluation, lower cost NRV rule

Question 3

Statement of comprehensive income

Answer 3

Two statements

1. one displaying profit and lost
2. one stating the comprehensive income