Lesson 1 Flashcards
It pertains to resources which
are controlled and owned by the
business.
Assets
It is derived from deducting the total liabilities to the total assets of a company.
Equity
pertains to the
obligations that the business owed to
other entities arising from past events
which are to be settled in the future?
Liabilities
is classified as Current Asset?
Prepaid Expenses
financial
statements presents the financial position
of an entity at a given or specific date?
Statement of Financial Position
Accounting Equation
Asset= Liabilities + Owners Equity
Asset - Liabilities = Owners Equity
Statement of Financial Position
Asset, Liabilities, and Equity
SFP also called balance sheet. Its reports the permanent accounts as of the end of an accounting period.
Statement of Financial Position
What the business owns
Assets
What the business own and claims
Liabilities
What the business is worth
Owners Equity
are resources with future benefits that are within the control of the company.
Assets
Resources are classified into asset accounts based on its future use to the company.
1.Cash
2.Receivables
3.Inventory
4.Prepaid Expenses
5.Property, Plant and Equipment
6.Intangible Assets
The most well-known asset class first
Cash
is a general term that refers to the company’s right to collect or claim payment.
Receivables
is another kind of receivables. It is evidenced by promissory notes (PN).
Note Receivable
account reports the cost of unsold merchandise.
Inventory
is an important issue in inventory accounting. The owner places his goods “on- _______” in the premises of the store owner.
Consignment
refer to future expenses that the company had paid for in advance.
Prepaid Expenses
Another kind of prepaid expenses is
Insurance
are long-term assets that are used in the operations of the company.
Property, Plant, and Equipment or PPE for short
are long-term assets similar to PPE. These assets will be used in the business for more than one year. The allocation of the cost of _________ to the year it was used is called amortization.
Intangible Assets
these are obligations that the company is required to pay.
Liabilities
refers to the unpaid expenses of the company as of the cut-off date of the statement of financial position.
Accrued Expenses
Customer deposits or down payments are customer payments received before the delivery of goods or services.
Unearned Income
refer to obligations with due dates that fall more than one year from the date of the SFP.
Long-Term Liabilities
Investment made by partners to the business is
Capital
