Lectures - Elements of Accounting

Question 1

3 Criteria for Asset

Answer 1

1- probable future economic benefit
2- ownership (or control)
3- obtained as a result of a transaction or event

Question 2

3 criteria for Liability

Answer 2

1- probable future economic cost
2- currently obligated
3- incurred as a result of a transaction or event

Question 3

2 criteria for Revenue

Answer 3

1- increase in asset

2- as a result of goods sold or services rendered

Question 4

2 criteria for Expense

Answer 4

1- cost where the benefit is received

2- cost that generated the benefit is in the same time period.

Question 5

Executory contract

Answer 5

a promise for a promise. Do not get recorded on a financial statement