d elements that are most dinectly related to measuring t E2-S (LO4) (Elements of
ID: 2332512 • Letter: D
Question
d elements that are most dinectly related to measuring t E2-S (LO4) (Elements of Financial Statements) Ten interrelah performance and financial status of an enterprise are provided below Distributions to owners Expenses Comprehensive income Gains Revenues Equity Investments by owners Instructions ldentify the element or elements associated with the 12 items al Arises from peripheral or incidental transactions b) Obligation to transfer resources arising from a past transiction. ic) Increases ownership interest d) Declares and pays cash dividends to owners le) Increases in net assets in a period from nonowner sources (0 Items characterized by service potential or future economic benefit. g) Equals increase in assets less liabilities during the yeat, after adding distributions to owners and subtracting invest ments by owners th) Arises from income statement activities that constitute the entity's ongoing major or central operations. a) Residual interest in the assets of the enterprise after deducting its liabilities. g) Increases assets during a period through sale of product. k) Decreases assets during the period by purchasing the company's own stock. D Includes all changes in equity during the period, except those resulting from investments by owners and distributions to owners.Explanation / Answer
Ans A) It will be categorized as “Gain/ Loss”. Since It arises from incidental transactions.
Ans B) It will be categorised as “Liability”, Since It is an obligation.
Ans C) Increases ownership interest will be categorised as Investment by owners, since, this will be termed as capital hence investment by owners.
Ans D) Declares and pays cash dividends to owners will be categorised as Distribution to owners
Ans E) This will be comprehensive income
Ans F) It should be categorised as Assets, since It has future economic benefits.
Ans G) This will again be classified as comprehensive income
Ans h) This has to be categorised as an expenses since It is spent to manage operational activities of business.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.