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FAR 1 BSA 1 (1st Sem) > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

Business activities that are accountable

A

economic activities or transactions

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2
Q

It is an expression of monetary worth applied to a particular asset, group of assets, business entity, or services rendered.

A

Value

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3
Q

Two types of Business Transactions:

A
  1. External transactions
  2. Internal transactions
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4
Q

Are economic events involving the enterprise and other entities. These events or transactions may involve transfer of resources or obligation to or from the entities.

A

External transactions or exchanges

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5
Q

Are economic events in which only the enterprise participates.

A

Internal transactions

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6
Q

Are the quantitative information reported in the statement of financial position and income statement. Considered as the building blocks of the financial statements.

A

Accounting elements

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7
Q

The elements directly related to the measurement of financial position. These are the real accounts.

A

assets, liabilities and equity.

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8
Q

The elements directly related to the measurement of financial performance. They provide information on the changes in equity as the result of business operations

A

income and expenses.

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9
Q

Popularly known as income statement accounts. They are also called nominal accounts because their usefulness is limited to the year when they are incurred.

A

income and expenses

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10
Q

Are properties or rights on properties owned by the business. These items of value are used by the enterprise in their day to day activities.

A

Assets

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11
Q

Under the Revised Conceptual Framework, it is defined as a present economic

A

Asset

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12
Q

It is a right that has the potential to produce economic benefits

A

Economic resource

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13
Q

It is the time between acquisition of assets for processing and their realization in cash or cash equivalents.

A

operating cycle

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14
Q

Includes currency or cash items on hand

A

Cash

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15
Q

Are short term highly liquid investments that are readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

A

Cash equivalents

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16
Q

Investments which are readily marketable and represent temporary investment of funds available for current operations and are intended to meet working capital requirements.

A

Trading Securities

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17
Q

Are open accounts or those that are not supported by promissory notes.

A

Accounts receivable

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18
Q

A contra-asset account which is provided for possible losses from uncollected accounts.

A

Allowance for doubtful accounts

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19
Q

Amount collectible that are evidenced by a promissory note or a written promise to pay

A

Notes receivables

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20
Q

Goods held for sale by trading concern

A

Merchandise Inventory or merchandise

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21
Q

Inventories held by manufacturing firms
advance

A

Finished goods, goods in process, raw materials and factory or manufacturing
supplies

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22
Q

Rent paid in advance

A

Prepaid rent

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23
Q

Insurance paid in advance

A

Prepaid insurance

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24
Q

Stationary and other supplies purchased for use and are still unused.

A

Unused supplies

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25
Q

All other assets except current assets are non-current assets. These include tangibl intangible, operating and financial assets of a long-term nature.

A

Non-Current Assets

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26
Q

These are tangible assets which are held by the enterprise in production or supply goods or services, for rental to others, or for administrative purposes, and are expects be used during more than one period (PAS No.16)

A

Property, Plant and Equipment or Fixed Assets

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27
Q

A piece of lot or real estate used by the business

A

Land

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28
Q

A structure or building owned or controlled and used as office, store or factory of the enterprise

A

Building

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29
Q

Include typewriters, adding machines, calculators, computers

A

Office equipment

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30
Q

Include cash register, calculators

A

Store equipment

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31
Q

Include delivery truck or jeep used for transporting merchandise

A

Delivery equipment

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32
Q

Contra-account used to accumulate expired cost of fixed
assets. It is a deduction from property, plant and equipment.

A

Accumulated depreciation

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33
Q

Are assets held by an enterprise for the accretion of wealth

A

Investments

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34
Q

It is readily realizable and is intended to be held for not more than one year.

A

Current investment

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35
Q

It is intended to be held for more than one year.

A

Long-term investment

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36
Q

It is defined by PAS 38 as identifiable non-monetary assets without physical substance.

A

intangible assets

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37
Q

Right granted to authors, composers, playwrights, artists, publishers or distributors to publish and dispose of their works for a limited time.

A

Copyright

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38
Q

Right granted to operate a utility or to manufacture or to market a product of another company within a specified area

A

Franchise

39
Q

Right granted to an inventor to manufacture or produce his inventions or products.

A

Patent

40
Q

A symbol, sign, slogan or name used to mark a or to distinguish it from other products.
product

A

Trademark or brand name

41
Q

An intangible advantage that increases earnings over what is normal.

A

Goodwill

42
Q

It is defined as the present obligation of an entity to transfer an economic resource as a result of past events.

A

Liability

43
Q

Amounts due to other parties when it is evidenced by a promissory note

A

Notes payable

44
Q

Amounts due to suppliers for the purchase of goods or services on credit

A

Accounts payable

45
Q

Expenses incurred but not yet paid

A

Accrued expenses

46
Q

Unpaid interest on borrowings

A

Interest payable

47
Q

Services rendered by employees but still unpaid

A

Salaries payable

48
Q

Obligations due to banks for loans obtained (current portion)

A

Bank loans payable

49
Q

Income received but not yet earned.

A

Deferred revenue

50
Q

Amount due and payable by the enterprise to Social Security System

A

SSS premium payable

51
Q

Amount due and payable by the enterprise to Philippine Health Insurance Corporation

A

Phil Health premium payable

52
Q

Amount due and payable by the enterprise to BIR for the tax withheld from employees

A

Withholding tax payable

53
Q

Economic obligations secured by collateral

A

Mortgage payable

54
Q

Income received in advance but not yet earned and which will be realized as income over a period of more than one year or the normal operating cycle if it exceeds one year.

A

Deferred revenue

55
Q

Represents residual interest in the assets of the enterprise after deducting all liabilities. It is otherwise known as net assets or net worth.

A

Equity

56
Q

This includes the capital contribution of the owner made at the formation of the business or subsequent thereto.

A

Owners’ capital

57
Q

This is used for recording the withdrawal of capital by the
owner

A

Owner’s Drawing

58
Q

For a corporation, equity accounts are ordinary share or common stock and preference share or preferred stock. (not a question)

A

No answer

59
Q

Refers to the earnings of the enterprise.

A

Income

60
Q

Income is defined as increases in assets or decreases in liabilities that results in increases in equity, other than those relating to contributions from equity holders. (Not a question)

A

No answer

61
Q

Represents charges to clients or customers for services rendered

A

Service income

62
Q

Charges to clients by professionals for services rendered.

A

Professional fees or professional income

63
Q

Represent charges for the use of assets like equipment and spaces in buildings

A

Rent income

64
Q

Represents charges to customers for repair services rendered.

A

Repair income

65
Q

Represent charges to customers for laundry services rendered

A

Laundry income

66
Q

Represents charges to passengers for transportation services rendered

A

Transportation income or fares earned

67
Q

Represent amount of tickets sold to watchers of games, shows or movies

A

Ticket sales

68
Q

Income earned by the business coming from other sources which is not the main line of business and could not be clearly identified

A

Miscellaneous income

69
Q

Represent income from the sale of merchandise

A

Sales

70
Q

Represent deduction from sales due to merchandise returned by customers

A

Sales returns

71
Q

Represent deductions from selling price of goods with defec goods sent to customers but not as ordered. The goods are retained by customers.

A

Sales allowances

72
Q

Deductions from the selling price due to payments of th within the discount period.

A

Sales discounts

73
Q

It is defined as decrease in assets or increase in liabilities that results in decreases in equity, other than those relating to distributions to equity holders.

A

Expense

74
Q

These accounts represent the value of the goods sold.

A

Cost Accounts

75
Q

Represent the original acquisition price of the goods for resale

A

Purchases

76
Q

Represent the cost of goods purchased but returned to suppliers because they are either damaged, defective or unacceptable

A

Purchase returns

77
Q

Represent the reduction in the cost of defective or damaged goods bought but nor returned to the supplier

A

Purchase allowances

78
Q

Represent the reduction in the amount to be paid to the supplier due to payment of account within the discount period

A

Purchase discounts

79
Q

Represent the cost of transporting goods purchased from the suppliers to the store or the warehouse of the business

A

Freight in

80
Q

Represents the value of services rendered by employees and laborers. Account titles like office salaries, sales salaries and the like may be used.

A

Salaries and Wages

81
Q

Includes advertising or promotional expenses. This includes cost of publication in print media and propaganda in radio and television

A

Advertising expense

82
Q

Amount paid or incurred for the use of properties

A

Rent expense

83
Q

Amount paid to maintain company assets in good working
conditions

A

Repairs and Maintenance

84
Q

Amount paid for services of conveyance or means of transportation of goods to customers

A

Transportation expense

85
Q

Amount of taxes and other licenses paid to the government

A

Taxes and licenses

86
Q

It is the portion of the cost of a fixed asset that is charged or allocated as expense for the period

A

Depreciation expense

87
Q

Premiums on insurance policies charged to expense

A

Insurance expense

88
Q

Amount of supplies used. Specifically termed as office supplies expense or store supplies expense

A

Supplies expense

89
Q

Cost of light and water consumed by the business. An account title Water and Electricity or Heat, Light and Water may be used

A

Utilities expense

90
Q

Represent value placed on activities that will promote goodwill and increase customers’ patronage.

A

Representation and Entertainment

91
Q

Amount paid for postage, telephone and other forms of communication

A

Postage and Communications

92
Q

Contributions of employer to the Social Security System

A

SSS Premiums

93
Q

Relatively small amount paid for items or services which do not fall under the above accounts.

A

Miscellaneous expense

FAR 1 BSA 1 (1st Sem) (2 decks)

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