Question

Identify the element or elements associated with these items (i.e. liability, equity, loss, expense, revenue, assets, investment, gains, loss, distributions)

A) Arises from peripheral or incidental transactions.
B) Obligation to transfer resources arising from a past transaction.
C) Increases ownership interest.
D) Declares and pays cash dividends to owners.
E) Increases in net assets in a period from nonowner sources.
F) Items characterized by service potential or future economic benefit.
G) Equals increase in assets less liabilities during the year, after adding distributions to owners and subtracting investments by owners.
H) Arises from income statement activities that constitute the entity’s ongoing major or central operations.
I) Residual interest in the assets of the enterprise after deducting its liabilities.
J) Increases assets during a period through sale of product.
K) Decreases assets during the period by purchasing the company’s own stock.
L) Includes all changes in equity during the period, except those resulting from investments by owners and distributions to owners.

Answer 1

The question explores financial and accounting elements such as gains, liabilities, investments, distributions, revenue, assets, equity, losses, and comprehensive income, which are fundamental in understanding a company's financial position as reflected on its balance sheet.

Step-by-step explanation:

Identifying the elements associated with the provided items in the context of accounting and financial statements is paramount for understanding business transactions and the health of a business. Here's the breakdown:

A) Gains: Arises from peripheral or incidental transactions.B) Liability: Obligation to transfer resources arising from a past transaction.C) Investment: Increases ownership interest.D) Distributions: Declares and pays cash dividends to owners.E) Revenue: Increases in net assets in a period from nonowner sources.F) Assets: Items characterized by service potential or future economic benefit.G) Equity: Equals increase in assets less liabilities during the year, after adding distributions to owners and subtracting investments by owners.H) Revenue: Arises from income statement activities that constitute the entity’s ongoing major or central operations.I) Equity: Residual interest in the assets of the enterprise after deducting its liabilities.J) Revenue: Increases assets during a period through sale of product.K) Loss: Decreases assets during the period by purchasing the company’s own stock.L) Comprehensive Income: Includes all changes in equity during the period, except those resulting from investments by owners and distributions to owners.

These elements play a critical role in understanding a company's balance sheet, where the T-account helps in organizing these elements, showing assets on one side and liabilities plus net worth on the other.