Elements

Question 1

What is the Definition of a Asset?

Answer 1

-Something which is controlled by the entity,
future economic benefit will flow to the entity
and is the result of a past event
-The result of a PAST EVENT
Which is PRESENTLY controlled by the entity
And FUTURE ECONOMIC BENEFIT will flow to the entity

Question 2

What is the definition of a Liability?

Answer 2

-Something which is a present obligation of the entity,
future economic benefit will flow from the entity
and is the result of a past event.
-The result of a PAST EVENT
Which is PRESENTLY obliged to be repaid by the entity
And FUTURE ECONOMIC BENEFIT will flow from the entity.

Question 3

What is the definition of Owners Equity?

Answer 3

Equity is residual interest in the assets of the entity after deducting all its liabilities.
Remember Eq=Assets-Liabilities

Question 4

What is the definition of Income?

Answer 4

-Increases in economic benefits during the accounting period in the form of inflows of assets or decreases in liabilities that result in increases in equity, other than those relating to contributions from owners.
-Remember:
I- Inflow
I-
I- Increase in Equity
I- Increase in Asset or Decrease in Liability
NC- Not by contribution by owner

Question 5

What is the definition of Expenses?

Answer 5

Decreases in Economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences in liabilities that result in decreases in equity other that those relating to distributions to owners.