Financial Elements

Question 1

What is the asset?

Answer 1

Something which is presently controlled by the entity,
future economic benefit will flow to the entity
and is the result of a past event
Remember PPF

Question 2

What is equity?

Answer 2

This represents the owners financial interest in the business. Calculated by Assets – Liabilities.
Remember PPF

Question 3

What is income?

Answer 3

Any inflow
which increases equity 
through either increasing assets
(or decreasing liabilities) 
other than contribution by owner.
 Remember IIIINC

Question 4

what is Liability?

Answer 4

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.

Question 5

What are expenses?

Answer 5

Any outflow 
which decreases equity 
through either decreasing assets or increasing liabilities 
other than drawings by owner .  
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