Accounting Process: Chapter 6

Question 1

It represents the compensation paid to employees and workers.

Answer 1

Payroll

Question 2

Employees: Salaries, Workers: ________

Answer 2

Wages

Question 3

Employees: __________, Workers: Wages

Answer 3

Salaries

Question 4

It is the amount paid for employees monthly or semi-monthly.

Answer 4

Salaries

Question 5

It is the amount paid for workers based on a daily rate, hourly rate or a piece rate.

Answer 5

Wages

Question 6

It is the government agency tasked to collect different taxes from all earners.

Answer 6

BIR (Bureau of Internal Revenue)

Question 7

It is a tabular form prepared by the Accounting Department to determine how much salaries and wages are to be paid to employees and workers.

Answer 7

Payroll Sheet

Question 8

What are the 5 important columns in a payroll sheet?

Answer 8

1. Employee’s Name
2. Gross Pay
3. Deductions
4. Net Pay or Take Home Pay
5. Employee’s Signature

Question 9

Deductions from Gross Pay: It is the amount to be withheld for tax purposes.

Answer 9

Income Tax

Question 10

It is a prepaid expense account where cash has been paid in advance for service to be received from the employee or worker.

Answer 10

Advance Salary

Question 11

It is paid only by the employer.

Answer 11

EC or Employee’s Compensation Insurance

Question 12

It is a procedure intended to protect the assets of the business and to ensure compliance not only with company policies but also contracts and government regulations.

Answer 12

Internal Control

Question 13

It is another bank account where a business deposits all extra cash which earns interest.

Answer 13

Savings Account

Question 14

It represents the amount for which the asset could be sold or bought in its present condition.

Answer 14

Market Value

Question 15

It states that acquired assets should be recorded at the actual price established on the acquisition date.

Answer 15

Exchange Price or Cost Concept

Question 16

True or False: The acquisition date from the viewpoint of the business is the date when it is invested.

Answer 16

True

Question 17

It is also called the original cost. It represents the unexpired cost or remaining utility of the asset.

Answer 17

Book Value

Question 18

It is the incidental expenses incurred in transporting the asset to the place of the buyer.

Answer 18

Capital Expenditures

Question 19

It is a discount granted for paying an account promptly.

Answer 19

Rebate

Question 20

It is a reduction on the price given to the buyer to cover up for defects or spoilage on the asset purchased without returning the asset.

Answer 20

Allowance

Question 21

It occurs when a better model is invented or produced than what is originally acquired.

Answer 21

Obsolescence

Question 22

It results when the asset can no longer meet the demands of the business.

Answer 22

Inadequacy

Question 23

The one who made the promissory note.

Answer 23

Maker or Debtor

Question 24

The one who receives the promissory note.

Answer 24

Payee or Creditor

Question 25

It is a promissory note which face value is the same as the maturity value.

Answer 25

Non-Interest Bearing Note

Question 26

It is a promissory note where the maturity value is higher than its face value or principal because of the interest charge.

Answer 26

Interest Bearing Note

Question 27

It is the amount to be paid on the due date.

Answer 27

Maturity Value

Question 28

It is the amount stated in the promissory note.

Answer 28

Face Value or Principal