Terms In Financial Statement

Question 1

This is the amount of actual money business has at its disposal

Answer 1

Cash

Question 2

Includes coins, currencies, money orders, bank checks, bank deposits and other cash accounts that are available for business operations.

Answer 2

Cash

Question 3

If cash is in the office premises, it is termed as;

Answer 3

Cash on hand

Question 4

Cash deposited in the bank

Answer 4

Cash in bank

Question 5

Collectibles from customers, clients, and other persons for money, goods, or services provided by the business on credit basis

Answer 5

Accounts receivable

Question 6

This kind of receivable has no added interest

Answer 6

Accounts receivable

Question 7

These are collectibles from customers or clients, who issued promissory notes in exchange for goods or services received, and as evidence of their obligation to pay the business.

Answer 7

Notes receivable

Question 8

Usually, this kind of receivable has added interest

Answer 8

Notes receivable

Question 9

These are added collectibles from notes receivables

Answer 9

Interest receivable

Question 10

These are the available stocks of goods to be sold to consumers or customers

They are classified as current assets because these good when sold will either become cash if sold on a cash basis or accounts receivable if sold on credit basis, this is only applicable for merchandising and manufacturing business

Answer 10

Merchandise inventory

Question 11

Advanced payments made for benefits or services that the business will receive or use in the future

Answer 11

Prepaid expenses

Question 12

Investments in stocks of other companies

Can be sold to other parties in exchange for additional cash

Answer 12

Trading securities

Question 13

These type of current assets gain profits in the form of dividends

Answer 13

Trading securities

Question 14

Current liabilities

Answer 14

Accounts payable
Notes payable
Salary payable
Interest payable
Taxes payable
Utilities payable

Question 15

Obligations or debts to creditors that are not evidenced by a written promise to pay

Answer 15

Accounts payable

Question 16

Unpaid promissory notes given to creditors for money borrowed merchandise and/or other assets brought on credit

Answer 16

Notes payable

Question 17

Amounts owed to employees for services they have already rendered

Answer 17

Salaries payable

Question 18

This is the interest incurred in the current period but is not paid yet

Answer 18

Interest payable

Question 19

These are expenses from the current period that have yet to be paid as of the balance sheet date.

Answer 19

Taxes payable

Question 20

Liabilities to pay utility companies for telephone, electricity, and water services used by the business

Answer 20

Utilities payable

Question 21

Current assets

Answer 21

Cash or check
Accounts receivable
Notes receivable
Interest receivable
Merchandise inventory

Question 22

Fixed assets

Answer 22

Prepaid expense
Trading securities