CB LECTURE 101 Flashcards
Is a process of identifying, recording, and communicating information that is useful in making economic decisions.
Accounting
Accountable or Not Accountable
Identifying
Journalizing & Posting
Recording
Financial Reporting
Communicating
Refers to the process of recording transactions of the entity.
Bookkeeping
One Individual
DTI
Sole Proprietorship
More than one (Partners) Contractual Agreement
SEC
Partnership
More than one (shareholders) Operation of Law
SEC
Corporation
More than one (members) Cooperative Code
CDA
Cooperative
1.Control - exclusive right to enjoy benefits
2.Resulted from past event
3.Can provide economic benefits
assets
1.Present Obligation
2.Resulted from past event
3.Requires you to give up economic resources when settling them
liabilities
What the owner owns
equity
revenue & gain
income
income arises from the ordinary activities of a business
revenue
income arises from activities other than from the ordinary activities of a business
gain
- arises from the ordinary activities of a business
expenses
expenses arises from activities other than from the ordinary activities of a business
loss
includes money or its equivalent that is readily available for unrestricted use (e.g. Cash on Hand and Cash in Bank)
Cash
receivables supported by oral or informal promises to pay (a customer bought a milk tea worth 1,000 from Mr. Pogi and told that he will pay for it next week)
A/R
receivables supported by written or formal promises to pay in the form of promissory notes (A customer bought a milk tea worth 1,000 from Mr. Pogi and he wrote a promissory note that he will pay for it within 30 day)
Notes receivable
represents the goods that are held for sale by a business (Mr. Pogi purchased milk worth 3,000 to be used as ingredient for his milk tea business).
inventory
consist of various assets such as machineries, vehicles, furniture & fixtures to be used in the business (Mr. Pogi purchased a sealing machine worth 5,000).
Equipment
obligations supported by oral or informal promises to pay by the debtor (Mr. Pogi bought ingredients worth 3,000 from a supplier and told that he will pay for it next week)
Accounts Payable
obligations supported by written of formal promises to pay the debtor in the form of promissory notes ( Mr. Pogi borrowed money from the bank and he qrote a promissory note that he will pay for it within 5 years)
Notes Payable
the residual amount of assets after deducting liabilities (Mr. Pogi invested 3,000 for his milk tea business )
Owner’s Capital/Owner’s Equity
this account is used to record the temporary withdrawals of the owner during the period.
Owner’s Drawing
revenues earned from rendering services
Service Fees
revenues earned from sale of goods
Ex. Sale of milk tea
Sales
income earned that are not classified as revenues
Gains
represents the value of inventories that have been sold
Ex. The cost of the milk tea that was sold for 1,000 is 800.
Cost of Goods Sold
represents the sellers’ cost of delivering goods to customers.
Ex. The total cost of gasoline used in delivering milk tea to customer amounted to 1,000
Freight-out
salaries earned by employees for the services they have rendered in the business
Ex. Mr Pogi hired a cashier and her salary for the month is 5,000
Salaries Expense
represents the rentals that have been used up
Ex. Mr. Pogi rent a space for his milk tea business, 2,000 per month.
Rent Expense
