FABM 2 MIDTERMS REVIEWER (DARK SOULS DIFFICULTY) Flashcards
1
Q
The first line of the title
A
NAME OF THE
COMPANY
2
Q
Second line
A
Name of the Financial
Statement
3
Q
Third line
A
Date of the SFP
4
Q
Statement name?
A
Statement of the Financial
Position (SFP)
5
Q
SFP means what?
A
Statement of the Financial
Position (SFP)
6
Q
Accounting equation?
A
ASSETS = LIABILITIES + EQUITY
7
Q
is a resource controlled by the entity as a
result of past events that have the potential to
produce economic benefits.
A
Asset
8
Q
An asset is a resource controlled by ______________ as a
result of past events that have the potential to
produce economic benefits.
A
The Entity
9
Q
Asset is a resource controlled by the entity as a
result of what?
A
Past events that have the potential to
produce economic benefits.
10
Q
An item is an asset if it meets the
following criteria:
A
(a) resources controlled by the company
(b) potential to produce economic
benefits.
11
Q
This means that, whether directly or indirectly, the
asset can generate or be converted to
cash.
A
Potential to produce economic
benefits.
12
Q
potential to produce economic
benefits means what?
A
Whether directly or indirectly, the
asset can generate or be converted to
cash.
13
Q
means that the company can either prevent
unauthorized access to those benefits or
transfer those benefits to others.
A
Control
14
Q
resources controlled by the company means what?
A
means that the company can either prevent
unauthorized access to those benefits or
transfer those benefits to others.
15
Q
Are claims of creditors and owners, respectively.
A
Liabilities and equity
16
Q
Liabilities and equity are claims of whom?
A
Creditors and owners
17
Q
Claims of creditors on the assets of the
company are?
A
Legally superior to that of
the owners.
18
Q
Legally superior to that of
the owners.
A
Claims of creditors
19
Q
Creditors require payments of?
A
Principal and Interest
20
Q
Who require payment of principal and interest?
A
Creditors
21
Q
During closure, the owners are
entitled to what? And if only what?
A
the remaining assets only
after all the liabilities are settled.
22
Q
There is no legal obligation for what?
A
Companies to pay back the owners for
their investment in the company.
23
Q
Examples of assets?
A
- CASH
- RECEIVABLES
- INVENTORY
- PREPAID EXPENSES
- PROPERTY, PLANT AND
EQUIPMENT - INTANGIBLE ASSETS
24
Q
Is money owned by the company.
A
Cash
25
Cash kept in the
company's premises is called what?
Cash on hand
26
refers to money in the bank which can be kept in a savings or checking account.
Cash in Bank
27
Are not categorized as cash.
Time deposits
28
Are time deposits cash?
Fuck No
29
Provide banks with the cash flow they need to lend money to other customers.
Time Deposit
30
Why isn't time deposit known as cash?
You can't use it until the fixed term is over
31
Why isn't time deposit known as cash?
You can't use it until the fixed term is over
32
Refers only to funds
readily available to be spent on the company's
operations
Ending balance of cash
33
Ending balance of cash means?
Funds readily spendable for the company's operations/ Spendable funds
34
Are used for paying suppliers, utilities,
employee salaries, and others.
Cash outflows
35
It also funds the
acquisition of assets.
Cash outflows
36
Cash outflows also funds what?
Acquisition of assets.
37
It is also used for the settlement of
obligations.
Cash outflows
38
Cash outflows can also be used to settle what?
Obligations
39
Are sourced from the contribution of
owners, proceeds from borrowings, sale of assets, or
collections from customers.
Cash inflows
40
Cash Inflows are sourced from what?
contribution of owners, proceeds from borrowings, sale of assets, or collections from customers.
41
CASH Contribution of owners (Debit or credit?)
Debit
42
CASH Proceeds from borrowings (Debit or credit?)
Debit
43
CASH Collections from customers (Debit or credit?)
Debit
44
CASH Withdrawals of owners (Debit or credit?)
Credit
45
CASH Payment of borrowings (Debit or credit?)
Credit
46
CASH Payment to suppliers, utilities,
employees and other operating
expenses Payment to suppliers, utilities,
employees and other operating
expenses (Debit or credit?)
Credit
47
CASH Payment for acquisition of assets (Debit or credit?)
Credit
48
Is classified as part of cash if the date of the
check, referred to as date issue, is on or before the
SFP date
Check
49
A check is only classified as cash if the date on the check is?
On or before the SFP date
50
A check that is not presented to the bank for
payment dated _______________ from the date of
issue is "__________" and is _______________.
Six (6) after months, stale, not reported as cash
51
A check dated after the SFP date is classified as
_____________
Receivable rather than cash.
52
Earns higher interest over an
agreed period of time.
Time Deposit account
53
Those with a term of up to _____ are reported as _____________
90 days, Cash Equivalents
54
A Time Deposit account that
mature longer than ________ are reported as?
90 days, Investments
55
Is a general term that refers to the
company's right to collect or claim payment.
Receivables
56
Receivables is a general term that refers to the
company's right to_____________.
Collect or claim payment
57
The right to collect comes from what?
Unpaid sales or lending activities.
58
May promise to pay the seller at some future
time after delivery.
Customer
59
A customer may promise to pay the seller at some?
Future time after delivery.
60
A customer may promise to pay the seller at some future
time after delivery. This is a credit sales agreement and it
gives rise to _____________
Accounts Receivable (AR)
61
The AR account is increased by?
credit sales.
62
Is increased by credit sales.
The AR account
63
The AR account is increased by credit sales. On the
other hand, the account is decreased when the
customers ____________
Pay their accounts
64
Is evidenced by sales invoices and delivery
receipts.
The AR
65
The AR Is evidenced by?
Sales invoices and delivery
receipts.
66
Accounts receivable typically have a term of ______________ , which means a customer should pay ____________ from
the ___________. Some sellers give longer periods of
_________________
30 days, date of delivery, 60, 90, and 180 days.
67
ACCOUNTS RECEIVABLE Credit Sales (Debit or Credit?)
Debit
68
ACCOUNTS RECEIVABLE Customer account collected (Debit or Credit?)
Credit
69
is another kind of receivable.
Notes receivable
70
It is evidenced by a promissory note (PN).
Notes Receivables
71
Notes Receivable is evidenced by what?
Promissory Note
72
PN is a legal document
with the following details:
1. Borrower promise to pay;
2. Scheduled payment dates;
3. Principal and interest rate
73
Reports the cost of unsold
merchandise.
The inventory account
74
The inventory account reports only what?
Unsold Merchandise
75
The inventory account of a trading business contains merchandise held for?
Resale.
76
The ____________ of a trading
business contains merchandise held for resale
Inventory account
77
A ______________ will have more complex
inventories composed of ____________,
unfinished inventories in the middle of the
manufacturing process (may also be called work in
process), and ____________
Manufacturing company, Unused raw materials, Unsold finished goods.
78
The inventory account is increased by ________________. On the other hand, the account is
decreased by the ____________
Purchases of
merchandise, Cost of the merchandise sold
79
The ending balance of the inventory account refers
to the?
Remaining merchandise
Inventory
80
The ______________ refers
to the cost of the unsold or remaining merchandise
Inventory
ending balance of the inventory account
81
Inventory Cost of merchandise purchased (Debit or credit?)
Debit
82
Inventory Cost of merchandise sold (Debit or credit?)
Credit
83
Is one that buys and resells merchandise
for a profit
Trading or merchandising business
84
A trading or merchandising business is one that buys and resells merchandise
for what?
Profit
85
* The owner places his goods "_____________" on the
premises of the ___________
* The store is not obligated to _____________
* The owner may also what?
* On the other hand, the store owner will remit to the
_________ the proceeds from the sale of the
consigned items.
* The store owner's income from this transaction may be in
the form of ___________ from the sale and/or rent from the
store space used to display the consigned goods
* The consigned merchandise will be reported as?
* Only the ____________ is reported as inventory
* Those items that are to be used in the day-to-the-day
activities for the company are ______________
1) On Consignment, Store owner
2) Purchase the goods
3) Withdraw his unsold goods from the
store.
4) Merchandise owner
5) Commissions
6) Inventory by the merchandise owner.
7) Merchandise held for sale
8) Supplies and not inventory.
86
Refer to future expenses that the company had paid for in advance.
Prepaid expenses or prepayments
87
Prepaid Expenses are placed in this account until the services or items are _________________
Used and become expenses
88
Are recorded only when purchased goods
and services are used.
Expenses
89
Expenses are recorded only when purchased goods
and services are ________________
Used
90
The account prepaid expense is increased by the
company's ______________
Advance payments.
91
On the other hand,
the Advance Payments is decreased by either _______________
Usage or the
passage of time
92
The prepaid expense account will have an ending
balance equivalent to the ______________
Cost of unused services
93
Prepaid Expense Advance payments (Debit or Credit)
Debit
94
Prepaid Expense Cost of services used (Debit or Credit)
Credit
95
are long-term
assets that are used in the operations of the company.
These are classified as long-term assets (or non-current
assets) because these assets will be used in the business
for more than __________________
Property, Plant, and Equipment (PPE), one year
96
are land,
building, warehouse, automobiles, delivery vehicles,
computer equipment, and manufacturing equipment.
Property, Plant, and Equipment (PPE)
97
Only those assets ___________ will be reported as PPE.
owned and controlled by the
company
98
Assets that are subject to long-term lease may be
reported as ___________if certain conditions are satisfied
assets
99
The cost of purchasing PPE is not immediately
reported as an expense, rather, it is recognized as an
_______________
Asset
100
The process of recognizing the asset is called
__________
CAPITALIZATION.
101
As the asset is used, a portion of the cost is
transferred to ___________. This is referred to as
______________.
expense, depreciation
102
Sometimes, the company plans to sell the PPE at the
end of its useful life. The estimated proceeds from the
sale is called _______________
salvage value or residual value
103
Annual depreciation = _____________
Depreciable cost/Useful life
104
Depreciable cost = _________________
Cost – Salvage or residual value
105
have no tangible properties,
These are assets that you cannot see or touch.
Intangible Asset
106
Is a grant conferred by the government
to the creator of an invention, whether a
product or a process, for the sole right to make,
use, and sell that invention for a specified period
A patent
107
_____________ protects the legal rights of owners of
intellectual property such as authors of books
or writers of songs
Copyright
108
The ____________ refers to a word or words
used to identify a specific product and its
manufacturer.
Brand name
109
________ is a sign capable of distinguishing
the goods or services of one enterprise from
those of other enterprises. Trademarks are
protected by _______________
trademark, intellectual property rights.
110
These are obligations that the company are
required to pay
Liabilities
111
Payment for liabilities may be in?
Cash, goods or services
112
Entities to whom the company is indebted
are called ______________
Creditors.
113
obligations to the supplier of inventories
Accounts payable
114
Obligations evidenced by a promissory note.
Notes payable
115
refers to the unpaid
expenses of the company as of the cut-off
date of the Statement of Financial Position
Accrued expense
116
An expense that is already incurred but not yet paid
Accrued expense
117
Are accounted for
as accrued expenses until payment is
made to the phone company.
Post-paid service plans
118
Accrued Expenses Account payments (Debit or credit)
Debit
119
Account payments Expenses used and unpaid (Debit or credit)
Credit
120
Are
received before the delivery of goods or
services.
Customer payments or deposits
121
These will not count as Sales or Revenue
until deliveries or the rendering of Unearned Income
services are made.
Unearned Revenue
122
Unearned Revenue is increased by ________
received from customers and decreased by the
__________________
Advance payments, rendering of service or delivery of
merchandise.
123
Unearned Income Rendering of services or delivery
of merchandise (Debit or credit)
Debit
124
Unearned Income Unearned Income (Debit or credit)
Credit
125
refer to obligations
with due dates that fall more than one year
from the date of the SFP.
Long-term liabilities
126
Long-term liabilities are also referred
to as _____________
Non-Current Liabilities
127
Is the net assets of the business.
Equity
128
It is composed of the owners' investments
and the accumulated net income of the
company and net of any distributions to
the owners
Equity
129
Equity is composed of?
Owners investements, net income, distributions of the owner
130
It reflects the portion of the asset that
belongs to the owners of the business.
Equity
131
May be maintained to
follow the withdrawals of the owners
during the year, this too is closed to the
capital account at the end of the year.
Drawings account
132
is a temporary account that is used to contain profit or loss during the accounting period. The profit or loss summary is also called ____________
The profit or loss summary account, Income summary
133
The result would only show assets, liabilities and equity because
the expense, income and drawings accounts are zeroed in the
closing process
post-closing trial balance
134
After the posting of the closing entries, the balances of the
ledger accounts are determined and reported in a trial balance.
post-closing trial balance
135
is an adjusting entry of the current period that
is reversed and recorded as an opening entry in the following
accounting period.
Reversing entry
136
The preparation of reversing entries is an _______ in
the accounting process.
optional procedure
136
The preparation of reversing entries is an _______ in
the accounting process.
optional procedure
137
The purpose of reversing entry is to facilitate the recording of
_______ in the following accounting period.
expense and income
138
buys goods (i.e. inventories) and sells them to
customers for a profit.
A merchandising business
139
The goods bought by the merchandising business from its suppliers are
called ________
purchases.
140
The merchandiser _______ to the
purchase prices of goods and charges the total amount to the customer.
add-up a value (i.e. markup or gross profit)
141
The total amount charged to customers is called ________
sales.
142
Agreed selling price of the goods in sellers perspective
Sales
143
Return by the buyer of defective or
non-conforming goods to the seller in Buyer' s perspective
Purchase returns
144
Return by the buyer of defective or
non-conforming goods to the seller in sellers pespective
Sales return
145
Return by the buyer of defective or
non-conforming goods to the seller buyers pespective
Purchase returns
146
Agreed reduction in selling price sellers perspective
Sales discount
147
Agreed reduction in selling price Buyer's perspective
Purchase discount
148
Agreed reduction in selling price for
poor quality goods which the buyer
agreed to retake at reduced price Seller's perspective
Sales allowances
149
Agreed reduction in selling price for
poor quality goods which the buyer
agreed to retake at reduced price Buyer's perspective
Purchases allowances
150
Transportation cost of bringing the
goods to buyer's place of business Seller's perspective
Freight-out
151
Transportation cost of bringing the
goods to buyer's place of business Buyer's perspective
Freight-in
152
This is an established price determined by reference
to a catalog or general price list before deducting any discounts.
List price
153
This list price less any trade discounts.
Invoice price
154
This is the gross billable amount by the seller to the buyer.
Invoice price
155
This is the
amount that is indicated in the billing statement of the seller.
Invoice price
156
Also called volume discount or quantity discount, trade
discount pertains to a direct deduction to the invoice price on account of
volume purchases made by a buyer.
Trade discount
157
This discount is usually given when the
buyer is a fellow merchandiser in order to allow him to profit for the resale
of the goods to his customers.
Trade discount
158
Also called settlement discount, this is an additional
discount to the invoice price aside from the trade discount which is given to
the buyer for early payment.
Cash discount
159
An account used to record the cost of goods or merchandise bought for resale during the current reporting
period. This is normally a _______ balance.
Purchase, debit
160
An account used to record the transport cost of the goods purchased. This is an adjunct account (addition) to the
purchases account; and hence, it has a normal _____ balance.
Freight-in, debit
161
An account used for the agreed reduction in the price of goods.
Is a contra-account to the purchase account; hence, it has a normal ______
balance.
Purchase discount, Credit
162
This is normally given by the supplier on
account of early payment.
Is a contra-account to the purchase account; hence, it has a normal ______
balance.
Purchase Discount, Credit
163
An account used to record the cost of merchandise returned to the supplier and including
price reductions to the purchase which is granted by a supplier on account of unsatisfactory goods delivered. Just like the
purchase discount account, this is normally a ____ balance.
Purchase returns and allowances, credit
164
An account used to record advance payments made to a supplier for goods to
be purchased in the future. This is an asset account and has a normal _____balance.
Advances to supplier, debit
165
involves selling of
goods and collecting customers' accounts.
The sale and collection function
166
An account used to record the selling price of goods to a customer. The sales account has a normal _____balance
Sales ,credit
167
An account used to record the transport cost of the goods sold to customers.
Freight-out, expense
168
If goods are purchased from
the business warehouse, _______ normally shoulder the freight of their goods.
customers
169
An account used to record the agreed reduction in the price of goods sold to customers. Sales discount is a contra-account to the sales account;
hence, it has a normal _______ balance.
Sales discount, debit
170
This is the
equivalent a of purchase discount from the buyer's perspective. ____________ is a contra-account to the sales account;
hence, it has a normal _____balance.
Sales Discount, debit
171
An account used under a periodic inventory system to record the amount of sales returned
by customers including reductions in selling prices granted to customers because the merchandise was not satisfactory to a
buyer. This is also a contra-account to the sales account and has a normal _________ balance.
Sales returns and allowances, debit
172
An account representing advance payment made by a customer for goods to be delivered in the
future. This is a liability account and has a normal _______balance.
Advances from customer, credit
173
Ownership to the transfer of the goods to
the buyer from the moment the goods leave the warehouse of the seller which is normally the shipping date or invoice date.
FOB shipping point
174
Ownership to the goods transfer to the
buyer from the moment the goods arrive at the warehouse of
the buyer which is normally the delivery receipt date.
FOB Destination
175
The freight shall be paid by the
seller to the freight or cargo forwarder upon release
of the goods in his premises
Freight prepaid -
176
The freight shall be paid by the
buyer to the freight or cargo forwarder upon arrival
of the delivery in his premises
Freight collect
177
FOB destination date of recognition of sale and purchase
When the buyer receives the goods, When the buyer receives the goods,
178
FOB shipping point date of recognition of sale and purchase
At the point of shipment, at the point of shipment
179
The amount of purchases or sales to be recorded includes
the possible cash discount
Gross method
180
The amount of purchases or sales to be recorded excludes
the1 possible cash discount
Net method
181
After the recording of all merchandising transactions, an
unadjusted trial balance of the ledger accounts is drawn
similar to the process employed with servicing concern.
TRIAL BALANCE
