Accounting Elements (VCE)

Front

What is a liability?

Back

A liability is a present obligation of the entity to transfer an economic resource as a result of past events.

Front

What are current liabilities?

Back

A current liability is a present obligation of the entity to transfer an economic resource as a result of past events.

Current liabilities are obligations of the entity that are reasonably expected to be settled within 12 months after the end of the reporting period.

Front

What are non-current liabilities?

Back

A liability is a present obligation of the entity to transfer an economic resource as a result of past events. Non-current liabilities are obligations of the entity that are not required to be settled within 12 months after the end of the reporting period.

Front

What is owner's equity?

Back

Owner’s equity is the residual interest in the assets of the entity after deducting all its liabilities.

Front

What are revenues?

Back

Revenues are increases in assets or decreases in liabilities that result in increases in owner’s equity, other than those relating to contributions from the owner. Revenue arises in the course of the ordinary activities of a business and includes items such as sales, fees, interest, dividends, royalties and rent.

Front

What are expenses?

Back

Expenses are decreases in assets or increases in liabilities, other than those relating to distributions to the owner, that result in a decrease in owner’s equity. Expenses encompass losses as well as those expenses that arise in the course of the ordinary activities of a business. Expenses that arise in the course of the ordinary activities of an entity include cost of sales, wages and depreciation.

Front

Current assets

Back

A Current Asset is a present economic resource controlled by an entity as a result of past events. An economic resource is a right that has the potential to produce future economic benefits.

They are cash and other types of assets held primarily for the purpose of sale or trading, or are reasonably expected to be converted to cash, sold or consumed by a business within 12 months after the end of the reporting period.