Balance Sheet And Income Statement

Question 1

Total amount of revenue that the company was able to generate from selling products.

Answer 1

Sales

Question 2

To record returns of customers.

Answer 2

Sales Return

Question 3

Discounts given to customers who pay early.

Answer 3

Sales Discount

Question 4

The actual cost of merchandise that the company was able to sell.

Answer 4

Cost of Goods Sold

Question 5

The amount of inventory at the beginning of the accounting period. This is also the amount of ending inventory from the previous period.

Answer 5

Beginning Inventory

Question 6

Amount of goods bought during the current accounting period.

Answer 6

Purchases

Question 7

To record early payments by the company to the suppliers.

Answer 7

Purchase Discount

Question 8

To record merchandise returned by the company to their suppliers.

Answer 8

Purchase Return

Question 9

Used to record transportation costs of merchandise purchased by the company.

Answer 9

Freight In

Question 10

Total cost of inventory unsold at the end of the accounting cycle.

Answer 10

Ending Inventory

Question 11

These expenses are not directly related to the merchandising function of the company but are necessary for the business to operate effectively.

Example: salaries of the manager, security guard.

Answer 11

General and Administrative Expenses

Question 12

These expenses are those that are directly related to the main purpose of a merchandising business.

Example: salaries of sales agent, salary of driver of the delivery truck, advertising expenses, delivery expenses.

Answer 12

Selling Expenses

Question 13

Types of Business according to activities

Answer 13

Service Business
Merchandising Business
Manufacturing Business

Question 14

Forms of Business Organization

Answer 14

Sole Proprietorships
Partnerships
Cooperatives
Corporation

Question 15

Types of Financial Statement

Answer 15

Statement of Financial Position
Statement of Comprehensive Income
Statement of Cash Flow
Statement of Changes in Equity

Question 16

Is used to provide an overview of a business’s financial position at a given point in time

Answer 16

Statement of Financial Position

Question 17

Arethose accounts that continue to maintain ongoing balances over time. All accounts that are aggregated into the balance sheet are considered permanent accounts; these are the asset, liability, and equity accounts.

Answer 17

Permanent Accounts

Question 18

Includeallowance for doubtful accounts and accumulated depreciation.

Answer 18

Contra Asset Accounts

Question 19

Contains those revenue and expense items that have not yet been realized. It accompanies an organization’s income statement, and is intended to present a more complete picture of the financial results of a business.

Answer 19

Statement of Comprehensive Income

Question 20

Isan account that is closed at the end of every accounting period and starts a new period with a zero balance. The accounts are closed to prevent their balances from being mixed with the balances of the next accounting period.

Answer 20

Temporary Accounts

Question 21

Is used in a general ledger to reduce the value of a related account when the two are netted together. A contra account’s natural balance is the opposite of the associated account. If a debit is the natural balance recorded in the related account, the contra account records a credit.

Answer 21

Contra Purchases

Question 22

Shows the financial condition/ position of a business as of a given period. It consists of assets, liabilities, and capital or owner’s equity.

Answer 22

Balance Sheet

Question 23

Shows the result of operations for a given period. It consists of the revenue, cost, and expenses.

Answer 23

Income Statement

Question 24

Shows the changes in the capital or owner’s equity as a result of additional investment or withdrawals by the owner, plus or minus the net income or net loss for the year.

Answer 24

Statement of Owner’s Equity

Question 25

The key product or the end product of the accounting process

Answer 25

The Financial Statements

Question 26

Summarizes the cash receipts and cash disbursement for the accounting period.

Answer 26

Statement of Cash Flow

Question 27

Fundamental Accounting Equation

Answer 27

Assets=Liabilities+Owner's Equity

Question 28

Are resources owned by the business

Answer 28

Assets

Question 29

Are assets that can be realized one year after year-end date

Answer 29

Current Assets

Question 30

Are assets that cannot be realized one year after year-end date

Answer 30

Non-Current Assets

Question 31

Are assets without physical substance

Answer 31

Intangible Assets

Question 32

Currents Assets

Answer 32

Cash Accounts Receivable Merchandise Inventory Supplies Accrued Income Prepaid Expense

Question 33

Non-Current Assets

Answer 33

Property Plant and Equipment (equipment, furniture, building, land)

Question 34

Intangible Assets

Answer 34

Copyright, Trademarks, Patents

Question 35

Debt owned by the company

Answer 35

Liabilities

Question 36

Liabilities that fall due within one year after year-end date

Answer 36

Current Liabilities

Question 37

Liabilities that do not fall due within one year after year-end date

Answer 37

Non-Current Liabilities

Question 38

Current Liabilities

Answer 38

Notes Payable Accounts Payable

Question 39

Non-Current Liabilities

Answer 39

Loans Payable Mortgage Payable

Question 40

Are the owner's claim in the business

Answer 40

Owner's Equity

Question 41

Owner's Equity

Answer 41

Initial Investment/Capital Additional Investment Withdrawal

Question 42

Earned or generated by the business in performing services for a client.

Answer 42

Service Income

Question 43

Laundry services by a laundry shop

Answer 43

Laundry Income

Question 44

Medical services by a doctor

Answer 44

Medical Fees

Question 45

Dental services by a dentist

Answer 45

Dental Fees

Question 46

Legal services by a lawyer

Answer 46

Legal Fees

Question 47

Advisory services by a consultant

Answer 47

Consultancy Fees

Question 48

Accounting or auditing services by a certified public accountant

Answer 48

Audit Fees

Question 49

Include all payments made to employees or workers for rendering services to a company

Answer 49

Salaries and wages expense

Question 50

Is an expense related to the use of electicity, water and telecommunication facilities

Answer 50

Utilities expense

Question 51

Covers office supplies used by a business in the conduct of the daily operations

Answer 51

Supplies expense

Question 52

Is the annual portion of the cost of tangible assets such as buildings, machineries and equipment

Answer 52

Depreciation Expense

Question 53

Paid on insurance coverage such as premiums paid for health and life insurance, motor vehicles, or other properties.

Answer 53

Insurance Expense

Question 54

Is the amount of money charged to the borrower for the use of borrowed funds.

Answer 54

Interest expense

Question 55

All revenues are listed down in one section while all expenses are listed in another. Total revenue minus total expense= Net Income

Answer 55

Single-step

Question 56

There are several steps needed in order to arrive at the company`s net income.

Answer 56

Multi-step

Question 57

Format of the Income Statement

Answer 57

Single-step Multi-step

Question 58

Format of the Balance Sheet

Answer 58

Account Form Report Form