Accounting elements

Question 1

Define Asset

Answer 1

A present economic resource controlled by the entity (as a result of past events) that has the potential to produce future economic benefits.

Question 2

Define Liability

Answer 2

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

Question 3

Define Owners equity

Answer 3

The residual interest in the assets of the entity after the liabilities are deducted.

Question 4

Define Revenue

Answer 4

Assets increase or liabilities decrease and owners’ equity increases

Question 5

Define Expense

Answer 5

Assets decrease or liabilities increase and owners’ equity decreases.