Elements of financial statements

Question 1

Define assets

Answer 1

Resources a business owns or controls that are expected to provide future benefits

Question 2

Define liabilities

Answer 2

Obligations owed by a business to others that are expected to be settled in the future

Question 3

Define equity

Answer 3

claim by the owners on the net assets of a business

Question 4

Define income

Answer 4

Amounts earned from the activities of a business

Question 5

Define expenses

Answer 5

Costs incurred to earn income in the same accounting period