FAC 1602 TEST QUESTIONS WITH
ASSURED CORRECT ANSWER
What is an asset - ANSAn Asset is a resource controlled by the entity as a result of past events and
from which future economic benefits are expected to flow to the entity.
What is a liability - ANSA liability is a present obligation arising from past events, the settlement of
which is expected to result in an outflow of economic resources.
What is equity - ANSEquity is the residual interest in the assets of the entity after deducting all the
liabilities
What is income - ANSIncome is increases in assets, or decreases in liabilities, that results in increases
in equity, other than those relating to contributions from holders of equity claims
What is expenses - ANSExpenses are decreases in assets, or increases in liabilities, that result in
decreases in equity, other than those relating to contributions from holders of equity claims
ASSURED CORRECT ANSWER
What is an asset - ANSAn Asset is a resource controlled by the entity as a result of past events and
from which future economic benefits are expected to flow to the entity.
What is a liability - ANSA liability is a present obligation arising from past events, the settlement of
which is expected to result in an outflow of economic resources.
What is equity - ANSEquity is the residual interest in the assets of the entity after deducting all the
liabilities
What is income - ANSIncome is increases in assets, or decreases in liabilities, that results in increases
in equity, other than those relating to contributions from holders of equity claims
What is expenses - ANSExpenses are decreases in assets, or increases in liabilities, that result in
decreases in equity, other than those relating to contributions from holders of equity claims
