Performance is influenced by income and expenses. Income Expenses - increases in economic benefits = decreases in economic benefits recognized during the period as: -inflow of assets, - outflow of assets, - increases of assets, or - decreases of assets, or - decreases in liabilities, - increases in liabilities that results in increases in owner's equity, other than those decreases in owner's equity, other than those relating to contributions from relating to distributions to shareholders. shareholders. Profit or loss Income (performance) Expenses 5. Give some examples of expenses and income for a company. 6. Are they similar the terms expenses and payments? What about income and receipts? 7. State whether the following transactions generate expenses: a) purchase of raw materials; b) consumption of raw materials; c) acquisition of merchandise on credit; d) disposal of merchandise sold; e) recording the phone bill; 6) payment of bank foes g) recording dividends to be paid to shareholders. & State whether the following transactions generate income: a) collection from customers, b) sale of finished goods; c) receive of new contributions from shareholders; d) payment to an external supplier total debt was 100, exchange rate 1 - 3.6 lei/Euro, at the settlement date, the exchange rate was 1 - 3.4 lei/Euro; e) collection of interest revenue. 9. A clothing factory reveals the following elements: Elements subscribed and paid up capital shoes cash in hand building texture Amounts (lei) 50,000 2,000 1,000 30,000 5,000