Acc 1- Block 1 Definitions
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13 Terms
Define the term ‘an asset’
A present economic resource controlled by the entity as a result of past events
What is a liability?
A present obligation of the entity to transfer an economic resource as a result of past events
Equity is…
The residual interest in the assets of the entity after deducing all its liabilities.
Give the definition for an expense.
a decrease in assets or an increase in liabilities that decrease equity, not from owner distributions
Define the term ‘income’.
Increase in assets or decreases in liabilities that increase equity, not from owners contributions
Conceptual framework is…
A comprehensive set of concepts for financial reporting issued by the IASB (International Accounting Standards Board)
What is a business transaction?
An economic event which has an impact on the financial position of an entity.
The formula for calculating the conceptual proof of profit is…
Ending OE- Opening OE = Net Movement+ Distributions- Contributions= Profit