Elements of Financial Statements

Question 1

Asset

Answer 1

A present economic resource controlled by the entity as a result of past events

Question 2

Liability

Answer 2

A present obligation of the entity to transfer an economic resource as a result of past events.

Question 3

Equity

Answer 3

The residual interest in the assets of the entity after deducting all its liabilities.

Question 4

Income

Answer 4

Increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims.

Question 5

Expense

Answer 5

Decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to holders of equity claims.