Elements of Financial Statements
- Resources owned by an Entity
- Cash, accounts receivable, inventory, investments, property Plant and Equipment, equipment, intellectual property etc
- resources controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity.
• Liabilities are the obligations the business owes to others.
• Loans, Accounts Payable, payroll, Taxes etc
• Present obligations of the entity arising from past events, the settlement of which is expected to result in an outflow of resources embodying economic benefits.
• Equity represents the owner’s stake in the business. Equity is the value of a business if the owner were to liquidate all assets and pay off all liabilities.
• Share capital, accumulated profits and losses over time.
• The residual interest in the assets of the entity after deducting all its liabilities.
• Revenue is the money a business earns from its main activities, like selling products, providing services, renting out property, or anything else that brings in income.
• It represents the total earnings before any expenses are deducted.
• Expenses are the costs a business incurs to keep running.
• These include things like salaries and employee benefits, utility bills, rent, insurance, taxes, advertising, and other essential expenses needed to operate smoothly.
