Financial Statement Elements Relating to Income Are Defined in FASB

question 71

Multiple Choice

Financial statement elements relating to income are defined in FASB Concepts Statement 6 as follows:

• A) Gains are increases in equity from ongoing major or central operations of an entity.
• B) Expenses are outflows of assets or liabilities incurred from peripheral or incidental transactions of an entity.
• C) Revenues are inflows or other enhancements of assets or settlements of liabilities from ongoing major or central operations.
• D) Losses are all decreases in equity other than from transactions with owners.

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Definitions:

Physiological Need

A basic bodily requirement, such as for food, water, or sleep, necessary for survival.

Drive Reduction Theory

A theory of motivation that posits individuals are motivated to take actions in order to reduce the internal tension caused by unmet needs.

Homeostasis

The tendency of a biological system to maintain stable internal conditions despite external changes.

Homeostasis

The tendency of a biological system to maintain stability while adjusting to conditions that are optimal for survival.