Asked by Evans Aidoo on May 27, 2024
Verified
Probable future economic benefits obtained or controlled by an entity as a result of past transactions or events define
A) assets.
B) liabilities.
C) equity.
D) retained earnings.
Economic Benefits
Inflows of assets or reductions in liabilities that result in an increase in equity, other than those relating to contributions from equity participants.
Past Transactions
Historical financial activities or operations that have occurred in a company, used for reference or analysis in accounting processes.
- Understand the constituents of a corporate balance sheet (assets, liabilities, equity) and their explanations.
Verified Answer
DA
David ArimaMay 31, 2024
Final Answer :
A
Explanation :
The definition provided refers to assets, which are future economic benefits that an entity controls or owns as a result of past transactions or events. Liabilities refer to obligations that an entity owes to others, while equity represents the residual interest in the assets of an entity after deducting liabilities. Retained earnings are the portion of a company's profits that are not distributed as dividends, but are instead reinvested back into the company.
Learning Objectives
- Understand the constituents of a corporate balance sheet (assets, liabilities, equity) and their explanations.
Related questions
How Much of a Company's Assets Are Financed from Debt ...
The Balance Sheet Provides Information on All of the Following ...
Probable Future Sacrifices of Economic Benefits Arising from an Entity's ...
The Residual Interest in the Resources of an Entity That ...
Sandy's Balance Sheet Is Partially Completed ...