Accounting Elements

Question 1

Current Asset

Answer 1

a present economic resource controlled by the entity (as a result of past events) that is reasonably expected to be converted to cash, sold or consumed within the next 12 months after the end of the reporting period.

Economic resource = rights to an economic or financial benefit

Question 2

Non-current asset

Answer 2

a present economic resource controlled by the entity (as a result of past events) that is not held for resale and is reasonably expected to be used for more than the next 12 months after the end of the reporting period.

Economic resource = rights to an economic or financial benefit

Question 3

Current liability

Answer 3

present obligation of the entity (arising from past events) that are reasonable expected to be settled with a transfer of an economic resource within the next 12 months after the end of the reporting period.

Present obligation = legal responsibility

Question 4

Non-current liability

Answer 4

present obligation of the entity (arising from past events) that are not expected to be settled with a transfer of an economic resource within the next 12 months after the end of the reporting period.

Present obligation = legal responsibility

Question 5

Revenue

Answer 5

Are increases in assets or decreases in liabilities that result in increases in owner’s equity, other than those relating to contributions from the owner.

Question 6

Expense

Answer 6

Are decreases in assets or increases in liabilities that result in decreases in owner’s equity, other than drawings.