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Chapter 2: Fundamental Accounting Concepts, An economic resource is a…
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An economic resource is a right that has the potential to produce economic benefits.
e.g the right related to owning inventory is the benefit from the sale of the inventory
The potential to produce economic benefits doesn't need to be certain or even likely for something to be considered an economic resource
Expenses paid in advance = asset
Income received in advance = liability
Accounts receivable = asset
Accounts payable = liability
Components that are included in financial statements for an entity:
•Statement of financial position
•Statement of profit or loss - provides info about income and expenses
•Statement of changes in equity - provides info about profit as well as contribution from or distributions to owners
•Statement of cash flows - provides info about the operating, investing and financing cash flows
•Notes to financial statements - other info about nature of assets etc