Chapter 1, Problem 15Q

(a)

To determine

Elements of balance sheet:

Balance sheet is a financial statement that shows the three elements such as assets, liabilities, and stockholders’ equity of a company at a particular point of time. It reveals the financial health of a company. Thus, this statement is also called as the Statement of Financial Position. It helps the users to know about the creditworthiness of a company as to whether the company has enough assets to pay off its liabilities.

To describe: The definitions of assets, liabilities and Stockholders’ equity.

(b)

To determine

The items affect stockholders’ equity.