Question

An event that both effects the financial position of an entity and can be expressed in monetary term?

Answer 1

A complete set of financial statements is made up of five components: an Income Statement, a Statement of Changes in Equity, a Balance Sheet, a Statement of Cash Flows, and Notes to Financial Statements.

Answer 2

The events are Increases in revenues, depreciation etc.

• Accounting events are acts that have an impact on your assets and liabilities. Some events that affect are -
• Increase in Revenue -

1. Taking in extra money is an evident occurrence altering company's financial status. Increased sales are most common method for this to happen.
2. When firm's revenue grows, so does financial sheet. The financial condition may alter again depending on what firm does with the extra cash, like paying off debt or purchasing new machinery.

• Depreciation -

1. Depreciation allows to write off the decline in asset value. Depending on tax strategy, firm may want to depreciate assets fast or over a long period of time.
2. This is done to take advantage of the write-off the next year, when they may have a bigger tax burden to lower.