Effects of transactions on F/S

Question 1

According to the FASB conceptual framework, an entity’s revenue may result from:

Answer 1

An increase in an asset or a decrease in a liability from primary operations will result in a revenue

Question 2

According to the FASB conceptual framework, an entity’s gains and losses may result from:

Answer 2

Either increases or decreases in assets or liabilities from incidental transactions will result in gains or losses

Question 3

According to the FASB conceptual framework, an entity’s expense revenue may result from:

Answer 3

A decrease in an asset from primary operations will result in an expense

Question 4

True or False, revenues are inflows from an entities primary operations?

Answer 4

TRUE

Question 5

What is the effect of a revenue for an entity?

Answer 5

An increase in an asset or a decrease in a liability from primary operations