Step by Step SolutionStep 1: (a) Transactions that are related to peripheral or incidental – Gains or lossesGains or losses – The arises from peripheral or incidental transactions are associated with gains or losses element. Show
Step 2: (b) Transactions that are related to the obligation to transfer resources arising from a past transaction – LiabilityLiability –The obligation to transfer resources arising from a past transaction is associated with the liability element. Step 3: (c) Transactions related to Increases ownership interest – Investments by owners, comprehensive income, and also comes under revenues and gainsInvestment by owners – The increases in ownership interest are associated with Investment by owners, Comprehensive income, and Gains or losses. Step 4: (d) Transaction related to declaring and paying cash dividends to owners – Distribution to ownersDistribution to owners – Declares and paying cash dividends to owners are associated with the liability element. Step 5: (e) Transaction related to Increases in net assets in a period from non-owner resources – Comprehensive income and also gains and revenuesComprehensive income –The Increase in net assets in a period from non-owner resources is associated with the comprehensive income as well as gains and revenues. Step 6: (f) Transaction related to Items characterized by service potential – AssetsAssets – Items characterized by service potential are associated with the liability element. Step 7: (g) Transaction related to Equals increase in assets fewer liabilities during the year, after adding distributions to owners and subtracting investments by owners – Comprehensive IncomeComprehensive income – Equals increase in assets and fewer liabilities during the year, after adding distributions to owners and subtracting investments by owners is associated with comprehensive income. Step 8: (h) Transactions Arising from income statement activities that constitute the entity's ongoing major or central operations – Revenues, expensesRevenues or expenses – Transactions Arising from income statement activities that constitute the entity's ongoing major It is associated with the revenues or expenses element. Step 9: (i) Transaction relating to Residual interest in the assets of the enterprise after deducting its liabilities – EquityEquity – Residual interest in the assets of the enterprise after deducting its liabilities is associated with the equity element. Step 10: (j) Transactions related to Increased assets during a period through the sale of Product – RevenuesRevenues – Increased assets during a period through the sale of Products are associated with the revenue element. Step 11: (k) Transaction relating to Decreases assets during the period by purchasing the company's stock – Distribution to ownersDistribution to owners – Decreases assets during the period by purchasing the company's stock is associated with the distribution to owners element. Step 12: (l) Transactions relating to including all changes in equity during the period, except those resulting from investments by owners and distributions to owners – Comprehensive IncomeComprehensive income – includes all changes in equity during the period, except those resulting from investments by owners, and distributions to owners are associated with the comprehensive income element.
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Intro to Financial Accounting Anonymous Student 6 months ago Which basic element of financial
statements arises from peripheral or incidental transactions? a. Assets. b. Liabilities. c. Gains. d. Expenses. All replies Expert Answer 6 months ago The correct answer is c. Gains Explanation : Gains are basically the increase in equity from peripheral or incidental transactions of an entity from all the other events which affect the entity during a period excluding those that result from revenue or say investments from the owner. Incidental transactions are negotiated in private, are those transactions which are not offered to the customers in the ordinary course of business, on the other hand, peripheral transactions are transactions other than an organization’s normal activities like selling or buying. Study related questionsHow Expert Q&A works: Ask your study questions to our Experts. Receive an answer explained step-by-step. Get your answer as fast as 30 minutes. What are peripheral or incidental transactions?Incidental transactions are negotiated in private, are those transactions which are not offered to the customers in the ordinary course of business, on the other hand, peripheral transactions are transactions other than an organization's normal activities like selling or buying.
What is an incidental transaction?incidental transactions means any privately negotiated transactions for the provision of facilities, capacity, transport or telecommunications services that are not offered to customers in the ordinary course of the entity's business; Sample 1Sample 2.
What is an increase in equity during a period from Nonowner transactions?Comprehensive income is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.
What is peripheral transaction in accounting?Also referred to as peripheral activities. A company's activities outside of its main activities of buying/producing and selling.
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Is an increase in equity from peripheral or incidental transactions of an entity?
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