FAR_SFAC 6 (elements of financial statements)

Question 1

Assets

Answer 1

Assets are probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.

Question 2

Liabilities

Answer 2

Liabilities are probable future sacrifices of economic
benefits arising from present obligations of a particular entity
to transfer assets or provide services to other entities in the
future as a result of past transactions or events.

Question 3

Equity

Answer 3

Equity is the owner’s residual interest in the assets of an entity that remains after deducting its liabilities.

Question 4

Investments by owners (APIC)

Answer 4

Investments by owners are increase in net assets of a particular business enterprise resulting from transfer to it from other entities of something of value to obtain or increase ownership interests (or entity) in it.

Question 5

Distributions to owners (dividend)

Answer 5

Distribution to owners are decrease in net assets of a particular enterprise that result from transferring assets, rendering service, or incurring liabilities by the enterprise to owners.

Question 6

Comprehensive income

Answer 6

Comprehensive income is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Question 7

Comprehensive income

Answer 7

Comprehensive income is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

Question 8

Revenue

Answer 8

Revenues are inflows or other enhancements of assets of an entity or
settlements of its liabilities (or a combination of both) from delivering or
producing goods, rendering services, or other activities that constitute the
entity’s ongoing major or central operations

Question 9

Expenses

Answer 9

Expenses are outflows or other using up of assets or incurrences of liabilities (or a combination of both) from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major or central operations.

Question 10

Expenses

Answer 10

Expenses are outflows or other using up of assets or incurrences of liabilities (or a combination of both) from delivering or producing goods, rendering services, or carrying out other activities that constitute the entity’s ongoing major or central operations.

Question 11

Gains

Answer 11

Gains are increases in equity (net assets) from peripheral or incidental
transactions of an entity and from all other transactions and other events and circumstances affecting the entity except those that result from revenues or investments by owners.

Question 12

Losses

Answer 12

Losses are decreases in equity (net assets) from peripheral or incidental
transactions of an entity and from all other transactions and other events and circumstances affecting the entity except those that result from expenses or distributions to owners.