Which Basic Element of Financial Statements Arises from Peripheral or Incidental

question 137

Multiple Choice

Which basic element of financial statements arises from peripheral or incidental transactions?

• A) Assets.
• B) Liabilities.
• C) Gains.
• D) Expenses.

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Definitions:

Liquidity and Efficiency

Financial metrics that evaluate how quickly a company can meet its short-term obligations with its available assets and how effectively it utilizes its resources.

Solvency

The ability of an entity to meet its long-term financial obligations and continue its operations in the long term.

Profitability

The degree to which a business or activity yields profit or financial gain.

Financial Statement Analysis

The process of examining and analyzing a company's financial statements to make better economic decisions.