Elements

Question 1

What are assets?

Answer 1

Assets are present economic resources controlled by an entity as a result of past events.

Question 2

What is a current asset?

Answer 2

A current asset is expected to be sold, consumed, or converted into cash within 12 months after the end of the reporting period.

Question 3

What is a non-current asset?

Answer 3

A non-current asset is expected to be used by the business for a number of years and is not held for resale.

Question 4

What are liabilities?

Answer 4

Liabilities are present obligations of an entity to transfer an economic resource as a result of past events.

Question 5

What is a current liability?

Answer 5

A current liability is expected to be settled within 12 months after the end of the reporting period.

Question 6

What is a non-current liability?

Answer 6

A non-current liability is not expected to be settled within 12 months after the end of the reporting period.

Question 7

What is owner’s equity?

Answer 7

Owner’s equity is the residual interest in the assets of the entity after the deduction of its liabilities.

Question 8

What are expenses?

Answer 8

Expenses are decreases in assets or increases in liabilities that result in decreases in owner’s equity.

Question 9

What is revenue?

Answer 9

Revenues are increases in assets or decreases in liabilities that result in increases in owner’s equity.