Accounting Process: Chapter 6 Flashcards
It represents the compensation paid to employees and workers.
Payroll
Employees: Salaries, Workers: ________
Wages
Employees: __________, Workers: Wages
Salaries
It is the amount paid for employees monthly or semi-monthly.
Salaries
It is the amount paid for workers based on a daily rate, hourly rate or a piece rate.
Wages
It is the government agency tasked to collect different taxes from all earners.
BIR (Bureau of Internal Revenue)
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.
Payroll Sheet
What are the 5 important columns in a payroll sheet?
- Employee’s Name
- Gross Pay
- Deductions
- Net Pay or Take Home Pay
- Employee’s Signature
Deductions from Gross Pay: It is the amount to be withheld for tax purposes.
Income Tax
It is a prepaid expense account where cash has been paid in advance for service to be received from the employee or worker.
Advance Salary
It is paid only by the employer.
EC or Employee’s Compensation Insurance
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.
Internal Control
It is another bank account where a business deposits all extra cash which earns interest.
Savings Account
It represents the amount for which the asset could be sold or bought in its present condition.
Market Value
It states that acquired assets should be recorded at the actual price established on the acquisition date.
Exchange Price or Cost Concept
True or False: The acquisition date from the viewpoint of the business is the date when it is invested.
True
It is also called the original cost. It represents the unexpired cost or remaining utility of the asset.
Book Value
It is the incidental expenses incurred in transporting the asset to the place of the buyer.
Capital Expenditures
It is a discount granted for paying an account promptly.
Rebate
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.
Allowance
It occurs when a better model is invented or produced than what is originally acquired.
Obsolescence
It results when the asset can no longer meet the demands of the business.
Inadequacy
The one who made the promissory note.
Maker or Debtor
The one who receives the promissory note.
Payee or Creditor
