Asked by Siqian Chang on Jul 09, 2024
Verified
The only financial statement element which cannot be defined independently of the other elements under the Conceptual Framework is:
A) equity.
B) assets.
C) income.
D) expenses.
Conceptual Framework
An underlying structure in accounting that guides the development of standards and the preparation of financial statements.
Equity
The value of an owner's interest in a property, minus the liabilities tied to the property.
Independent
Free from external control or influence; not depending on another's authority.
- Explain the influence of profit, loss, and owner investments on equity.
Verified Answer
EC
Erika Chapman-LawrenceJul 13, 2024
Final Answer :
A
Explanation :
Equities (or owner's equity) is a residual interest in the assets of an entity after deducting liabilities. It cannot be defined independently of assets and liabilities because it represents the difference between the two. Therefore, equity is dependent on the other financial statement elements and cannot be defined independently. Conversely, assets, income, and expenses can each be defined independently of the other elements.
Learning Objectives
- Explain the influence of profit, loss, and owner investments on equity.