FABM

Question 1

– Things that are owned by the business used to run it.

Answer 1

ASSET

Question 2

– Things that are owed by the business.

Answer 2

LIABILITY

Question 3

– Residue after deducting the expenditures from the assets;

Answer 3

EQUITY

Question 4

– the cost of operations that a company incurs to generate revenue.

Answer 4

EXPENSES

Question 5

– the total amount of income generated by the sale of goods or services related
to the company’s primary operations.

Answer 5

REVENUE

Question 6

– an asset or item acquired with the goal of generating income or
appreciation.

Answer 6

INVESTMENT

Question 7

– occurs when funds are removed from an account for personal use.

Answer 7

WITHDRAWAL

Question 8

– the product (or services) from your business is acquired on account
which indicates an increase in the equity. More so, sales account affects the asset in
terms of accounts receivable which indicates an increase.

Answer 8

Sales account

Question 9

– is when the payment for an advance service is received.

Answer 9

Service revenue

Question 10

Activity that results in a direct effect on the financial status of the business.

Answer 10

Business Activity

Question 11

Concise description of the
elements of the accounting
equation is necessary.

Answer 11

Account Titles

Question 12

When the business received
the money or made payment.

Answer 12

Cash

Question 13

The business is expecting a
payment from a debtor. It
increase the asset.

Answer 13

Account Receivable

Question 14

The business is expected to
pay a responsibility or a debt.
It increase the liability, but
decreases it when the debt
is paid.

Answer 14

Account Payable

Question 15

When the business is
expecting a revenue for the
provided product or rendered
services by the business. It
increase the equity.

Answer 15

Sales Account

Question 16

When the business is
received the revenue for the
provided product or rendered
services by the business. It
increase the equity.

Answer 16

Sales Revenue

Question 17

When the owner (or investor)
deposit (or donate) anything
of value to the business. It
increase the equity.

Answer 17

Capital

Question 18

When the owner (or investor)
deposit (or donate) pulls out
a thing of value from the
business. It decreases the
equity.

Answer 18

Withdrawal

Question 19

• located at the middle-top most portion
  of the chart.

Answer 19

Company name

Question 20

• “chart of accounts”, is located just
  below the company name, middle-top most of the chart.

Answer 20

Name of Chart

Question 21

• arranged in the asset, liability, equity,
  expenses, and revenue order.

Answer 21

Major Accounts

Question 22

• are account titles usually used for
  recording business transaction; depends on the activity of
  the business.

Answer 22

Particular Accounts

Question 23

is decided by the business depending on
what account titles are used in their transactions.

Answer 23

Account Code

Question 24

Transactions that has a financial impact to
the business

Answer 24

Financial Transaction

Question 25

_______ together with Secretaries and Commissions Exchange (SEC) set accounting various principles that every business follows

Answer 25

Financial Accounting Standards Board (FASB)

Question 26

is both responsible for setting and enforcing the accounting principles.

Answer 26

Secretaries and Commissions Exchange (SEC)

Question 27

 The business exist as a unit itself.  It is separated from its owner.  Only transactions and event related to the business are recorded in the business books.

Answer 27

BUSINESS ENTITY PRINCIPLE

Question 28

 The business is expected to continue indefinitely.  Expected that it update its books of account and will not liquidate its assets.

Answer 28

GOING-CONCERN PRINCIPLE

Question 29

 Preparation of financial statements are divided into time intervals.  Financial reports are done regularly on a specific period.

Answer 29

TIME-PERIOD PRINCIPLE

Question 30

 Any amount involved in the business is stated into a single monetary unit.  Money is used as the basic measuring unit for financial reporting.

Answer 30

MONETARY UNIT PRINCIPLE

Question 31

 All assets of a business entity are recorded at the original cost.

Answer 31

COST PRINCIPLE

Question 32

 Revenue should be recognized when earned regardless of collection.  Expenses are recorded when incurred regardless of payment.

Answer 32

ACCRUAL (or REALIZATION) PRINCIPLE

Question 33

 All expenses are recorded as they incur in the same period the revenue is earned.  Expenses are recognized not when the work is performed, or when a product is produced, but when the work has been done or the product has been delivered.  Only if no connection with revenue can be established, cost may be charged as expenses to the current period (e.g. office salaries and other administrative expenses).

Answer 33

MATCHING PRINCIPLE

Question 34

 All necessary, relevant, and material information should be reported for transparency.

Answer 34

DISCLOSURE PRINCIPLE

Question 35

 Cautiously exercise judgment.  Estimated value from uncertain result should conservatively reflected in the financial statement.

Answer 35

PRUDENCE (CONSERVATISM) PRINCIPLE

Question 36

 States that financial statements produced by the company is unbiased and verifiable.

Answer 36

OBJECTIVITY PRINCIPLE