Intermediate Accounting 14th Edition

Published by Wiley
ISBN 10: 0470587237
ISBN 13: 978-0-47058-723-2

Chapter 2 - Conceptual Framework for Financial Reporting - Questions - Page 68: 10

Answer

Distribution to owners vary from losses and expenses in that they embody transfers to the owners and don’t emerge from exercises planned to produce income. On the other hand, expenses vary from loss in that they emerge from the organizations' ongoing central operations or major. Losses emerge from incidental or peripheral transactions.

Work Step by Step

In business, losses are to be avoided while expenses are to be minimized. Distribution to owners, on the other hand, can neither be minimized or avoided.
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