Final answer:
The 10 elements of financial statements in SFAC 6 detail the economic resources, their claims, and changes to them. A T-account is part of the balance sheet, which is also described in SFAC 6. Understanding financial concepts like time deposits, transaction costs, and units of account is key to assessing financial statements.
Step-by-step explanation:
The 10 elements of financial statements defined in SFAC 6 describe economic resources, the claims to those resources, and the changes in them. Financial statements are integral to accounting and provide an overarching view of an entity's financial position. A simple way to visualize a component of financial statements is through a T-account, which presents a balance sheet in a two-column format, looking like a T due to the vertical line down the middle and the horizontal line under the columns for “Assets” and “Liabilities.” Understanding other financial concepts such as time deposit, in which a depositor commits to leaving money in a bank for a given time to earn a higher interest rate, transaction costs related to borrowing or lending money, and unit of account, as a measure of market values, is also crucial for interpreting the financial health of an institution.