Define the Elements of Financial Statements of Business Enterprises.

Solutions

Expert Solution

The elements of financial statements are general items which are included within the statements. These elements are described below.

1. Asset - Assets are items which are useful or valuable and can make some benefit in the future period. Examples are cash in hand, account recievable, plant and machinery etc.

2Liabilities - These are obligations payable to another entity or individual. Examples are accounts payable, taxes payable, and wages payable. For liabilities we have an obligation to mske payments to others.

3. Equity - Equity is the amount invested by companies sharehokders or owners. This is the value of shares company issued.

4. Revenue - Revenues are the earnings of the company through the selling. This can be an increase inasset or decrease in liablitiy. This revenue is generated through the sales.

5. Expenses - When the company process is happening there will be so many expenses like direct and indirect expenses. This can be considered as the reduction of value of earnings or assets. For example depreciation is an expense and it will reduce the value of some fixed asset.

These are the 5 elements of financial statements.

ThankYou....

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Identify the elements of financial statements described in the frame, and define them

Describe the criterial for recognition of elements in the financial statements

Identify the three (3) common financial statements for a business. In your answer define each statement...

Identify the three (3) common financial statements for a business. In your answer define each statement and tell the function, need, and purpose of the statement. Answer should be 150 words or more.

A. What are the elements of the Financial statements and indicate which Financial statement each element...

A. What are the elements of the Financial statements and indicate which Financial statement each element belongs to B. List and Explain Three assumptions and Four Principles in accounting C. Merchandizers are those in the business of buying and re-selling of Merchandize. Below is an example of the activities of transactions that take place in a Merchandizing business and answer the questions that follow During June of the current year, the following transactions took place between Distance Hardware, a retailer...

1. "Pervasive" financial misstatements are those that are confined to specific elements of the financial statements...

1. "Pervasive" financial misstatements are those that are confined to specific elements of the financial statements and do not represent a significant or substantial proportion of them. a. True b. False 2. The strength or weakness of internal controls is a critical concern for auditors because they can have an effect on the reliability of financial information. a. true b. false 3. For public companies, if a significant financial event occurs after the end of the audit client's accounting year...

Define the financial planning process List the elements of a good financial plan. Identify and discuss...

Define the financial planning process List the elements of a good financial plan. Identify and discuss the three most important personal factors and the three most important economic factors that affect your financial planning decisions.

The process of determining the monetary amount at which the elements of the financial statements are...

The process of determining the monetary amount at which the elements of the financial statements are to be included in the balance sheet and income statement is called measurement. The IASB Framework includes the four bases of measurement. Explain these four bases of measurement with example. Identify that which measurement bases is used by PHILIPS in preparing their financial statements? Annual Accounts of PHILIPS: https://www.results.Philips.com/publications/ar19

Consider the following abbreviated financial statements for Parrothead Enterprises: PARROTHEAD ENTERPRISES 2014 and 2015 Partial...

Consider the following abbreviated financial statements for Parrothead Enterprises: PARROTHEAD ENTERPRISES 2014 and 2015 Partial Balance Sheets Assets Liabilities and Owners’ Equity 2014 2015 2014 2015 Current assets $ 950 $ 1,016 Current liabilities $ 385 $ 416 Net fixed assets 3,967 4,608 Long-term debt 2,035 2,207 PARROTHEAD ENTERPRISES 2015 Income Statement Sales $ 12,530 Costs 5,990 Depreciation 1,080 Interest paid 200 a. What is owners' equity for 2014 and 2015? (Do not round intermediate calculations.) ...

Consider the following abbreviated financial statements for Parrothead Enterprises: PARROTHEAD ENTERPRISES 2017 and 2018 Partial...

Consider the following abbreviated financial statements for Parrothead Enterprises: PARROTHEAD ENTERPRISES 2017 and 2018 Partial Balance Sheets Assets Liabilities and Owners’ Equity 2017 2018 2017 2018 Current assets $ 1,308 $ 1,443 Current liabilities $ 601 $ 643 Net fixed assets 5,092 6,175 Long-term debt 2,815 2,999 PARROTHEAD ENTERPRISES 2018 Income Statement Sales $ 16,114 Costs 7,288 Depreciation 1,465 Interest paid 456 a. What is owners' equity for 2017 and 2018? (Do not round intermediate calculations.) b....

Consider the following abbreviated financial statements for Parrothead Enterprises: PARROTHEAD ENTERPRISES 2017 and 2018 Partial...

Consider the following abbreviated financial statements for Parrothead Enterprises: PARROTHEAD ENTERPRISES 2017 and 2018 Partial Balance Sheets Assets Liabilities and Owners’ Equity 2017 2018 2017 2018 Current assets $ 1,272 $ 1,395 Current liabilities $ 559 $ 607 Net fixed assets 5,050 6,109 Long-term debt 2,749 2,927 PARROTHEAD ENTERPRISES 2018 Income Statement Sales $ 15,826 Costs 7,234 Depreciation 1,429 Interest paid 432 a. What is owners' equity for 2017 and 2018? (Do not round intermediate calculations.) b....

Subjects