Here are the basic elements of financial statements that we learned about in earlier chapters: 

1. Assets

2. Liabilities

3. Owner’s equity

4. Revenues 

5. Expenses 

Each statement that follows is an important aspect of an element’s definition. Match the elements with the definitions. 

More than one number can be placed in a blank. Each number may be used more than once or not at all.

(a) _______ Increases in assets or decreases in liabilities resulting from the main profit-generating activities of the organization.

(b) _______Existing debts and obligations from past transactions.

(c) _______Resources owned by a business.

(d) _______Goods or services used in the process of earning revenue.

(e) _______A residual claim on total assets after deducting liabilities.

(f) _______The capacity to provide future benefits to the organization.