Elements Definition

Question 1

What is the definition of an asset

Answer 1

A resource PRESENTLY controlled by the entity as a result of PAST events and from which FUTURE ECONOMIC BENEFIT are expected to flow to the entity

Remember PPF

Question 2

What is the definition of a liability

Answer 2

Liabilities are PRESENT obligation of the entity arising from PAST events, the settlements of which is expected to result in an outflow of FUTURE ECONOMIC BENEFIT

Remember PPF

Question 3

What is the definition of owners equity

Answer 3

Equity is the residual interest in the assets of the entity after deducting all its liabilities that result in increases in equity, other than those relating to contribution from equity participants

Remember Eq=A-L

Question 4

What is the definition of expenses

Answer 4

Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences in liabilities that result in equity, other than those relating to distribution to equity participants

Remember D,D,D,D,N,D

Question 5

What is the definition of Income

Answer 5

Increases in economic benefits during the accounting period in the form or inflows or enhancements of assets or decreases in liabilities that result in increases in equity, other than those relating to contributions from equity participants

Remember I,I,I,I,NC