Chapter 4 - 6 Accountancy

Question 1

is the basic storage of information in accounting.

Answer 1

Account

Question 2

The 5 Major Account

Answer 2

Asset
Liabilities
Equity
Income
Expense

Question 3

Economic Resources you control that resulted from past events and can provide you future economic benefits.

Answer 3

Asset

Question 4

Present Obligations that have resulted from past events and can require you to give up resources when settling them.

Answer 4

Liabilities

Question 5

Asset minus Liabilities

Answer 5

Equity

Question 6

Increases in economic benefits during the period in the form of increases in assets that in result increases equity.

Answer 6

Income

Question 7

arises in the course of the ordinary activities of a business.

Answer 7

Revenue

Question 8

represent other items that meet the definition of income and may or not may arise in the course of the ordinary activities.

Answer 8

Gains

Question 9

Decreases in economic benefits during the period in the form of decreases in assets that in result decreases in equity.

Answer 9

Expense

Question 10

arises in the course of the ordinary activities of a business.

Answer 10

Expenses

Question 11

represents other items that meet the definition of expenses and may or not may arise in the same course of the ordinary business.

Answer 11

Loss

Question 12

Varies depends on the type of business

Answer 12

Chart of Accounts

Question 13

Banks chart of account should confirm to BSP Chart of Accounts.

Answer 13

BSP (Banko Sentral ng Pilipinas)

Question 14

Cooperatives chart of account should confirm to CDA Chart of Accounts.

Answer 14

CDA (Cooperative Development Authority)

Question 15

National Government Agencies MUST confirm to (RCA) Revised Chart of Accounts issued by the_______________________________

Answer 15

COA (Commission on Audit)

Question 16

The aggregate amount of estimated losses for uncollectible accounts receivable.

Answer 16

Short Introduction in Allowance for doubtful/bad debts accounts

Question 17

• The portion of the cost of a depreciable asset
• Decreasing of value over time
• Ex. bldg., equipment, vehicle etc..

Answer 17

Short Introduction in Depreciation expense

Question 18

total amount of depreciation expenses recognized since the asset was acquired and made available for use.

Answer 18

Accumulated Depreciation

Question 19

• “In & Out” sellers cost of delivering goods to customers.
• Other terms. Delivery expense, transportation cost, & carriage outwards.
• Contains tolls, gas, labor/rate of the worker.

Answer 19

Short Introduction in Freights

Question 20

“Book of original entries”

Answer 20

Journal

Question 21

Simplifies the recording process.

Answer 21

Special Journal

Question 22

Record Sales on Account.

Answer 22

Sales Journal

Question 23

Record Purchases of Inventory on Account.

Answer 23

Purchase Journal

Question 24

Record all transactions involving receipts of cash.

Answer 24

Cash Receipts Journal

Question 25

Record all transactions involving payment of cash.

Answer 25

Cash disbursement journal

Question 26

If a business does not utilize special journals, all transactions are record in the ____________

Answer 26

General Journal

Question 27

“Book of final entries”

Answer 27

Ledger

Question 28

Provides breakdown of the balances of controlling accounts.

Answer 28

Subsidiary Ledger

Question 29

Consist of group of accounts, or balances that needed a breakdown.

Answer 29

Controlling Account

Question 30

Contains all accounts appearing in the trial balance.

Answer 30

General Ledger

Question 31

Double-Entry system involves the use of the _______________________

Answer 31

CONCEPTS OF DUALITY AND EQUILIBRIUM

Question 32

Views each transactions as having a two fold effect on values, a value parted with and value valued with, and each transaction is recorded using at least two accounts

Answer 32

The Concept of duality

Question 33

Requires that each transaction is recorded in terms of equal debits and credits. For every peso debited, there is a corresponding peso credited, and vice versa

Answer 33

The concept of equilibrium

Question 34

of an account is on the side where an increase in that account is recorded

Answer 34

NORMAL BALANCE

Question 35

Normal Bal increases, vice versa

Answer 35

Rules of debits and credits

Question 36

Deduction to their related account accounts

Answer 36

Contra Account

Question 37

Increase to their related accounts

Answer 37

Adjunct Account

Question 38

-Represents the steps or procedures used to record Transactions and prepare FS. - The accounting cycle implements the accounting process of identifying, recording, and communicating economic information

Answer 38

Accounting Cycle

Question 39

Steps in Accounting Cycle

Answer 39

Analyzing Journalizing Posting to Ledger Prep. Unadjusted Trial Balance Prep. Adjusting Entries Prep. Adjusted Trial Balance Financial Statements Closing the Book Post-Closing Trial Balance Reversing Entries (opt)

Question 40

Gathers information and determines the effect of the transaction on the accounts

Answer 40

Analyzing

Question 41

Accountable events are recorded in the journals

Answer 41

Journalizing

Question 42

Information from journalizing is transferred to the ledger or **T accounts**

Answer 42

Posting to Ledger

Question 43

Balances the **General Ledger** to prove that credit and debit is equal. Serves as basis for **Adjusting Entries**

Answer 43

Prep. Unadjusted Trial Balance

Question 44

Updates the accounts as of the reporting date on an accrual basis by recording accruals, expiration of deferrals, estimations, and other events often not signaled by new source documents

Answer 44

Prep. Adjusting Entries

Question 45

**Trial Balance** are rechecked after adjustments are made. This serves as the preparation of the Financial Statements.

Answer 45

Prep. Adjusted Trial Balance

Question 46

these are the means by which information is processed is communicated to users

Answer 46

Financial Statements

Question 47

Temporary Accounts or Nominal Accounts are closed and the resulting profit or loss is transferred to an equity account

Answer 47

Closing the Book

Question 48

The equality of debits and credits are again rechecked after the closing pro

Answer 48

Post-Closing Trial Balance

Question 49

Are usually made at the beginning of the next account period to simplify the recording of certain transactions in that period

Answer 49

Reversing Entries (opt)

Question 50

Identifying and Analyzing Transaction and Events

Answer 50

Sales invoices (SI) Officials’ receipts (OR) Purchase orders Delivery receipts Bank deposit slips Bank statements Checks Statement of account, and the like

Question 51

Sales of Goods

Answer 51

Sales invoices (SI)

Question 52

Rendering of Services

Answer 52

Officials’ receipts (OR)

Question 53

a Document Issued by B or S, indicating types, quantities and agreed prices for Goods or Services.

Answer 53

Purchase orders

Question 54

Document signed by the receiver of a shipment acknowledging the receipt of goods

Answer 54

Delivery receipts

Question 55

Evidences a deposit to a bank account

Answer 55

Bank deposit slips

Question 56

Is a report issued by a bank **(on monthly basis)** that shows the Deposits and Drawals during the period and cumulative balance of a depositor’s bank account

Answer 56

Bank statements

Question 57

Is an instrument that orders a bank **(drawee)** to pay the person named on the check or the bearer thereof **(payee)** a definite amount of money from the drawer’s bank account

Answer 57

Checks

Question 58

Is a report that is sent to its customers listing the transactions with the customer during a period **(Notice of Billing)**, Ex. Balance of tuition.

Answer 58

Statement of account, and the like.

Question 59

Types Of Events

Answer 59

External Events Internal Events

Question 60

are transactions that involve the business and another external party, Ex. includes Sales, Purchases, Borrowing, payment of liabilities,

Answer 60

External Events

Question 61

are events that do not involve an external party, Ex. Includes production, casualty losses

Answer 61

Internal Events