BRIDGING 1

Question 1

BALANCE SHEET ACCOUNTS (PERMANENT ACCOUNTS): anything that has current or future economic value to a business.

Answer 1

Assets

Question 2

BALANCE SHEET ACCOUNTS (PERMANENT ACCOUNTS): refer to all assets that are expected to be realized, sold or consumed within the enterprise’s normal operation cycle.

Answer 2

Current Assets

Question 3

____________ is the interval of time from the date of acquisition of merchandise inventory, sell the inventory to customers and the ultimate collection of cash from the sale.

Answer 3

Operating cycle

Question 4

CURRENT ASSESTS: the account title to describe money, either in paper or in coins and money substitutes like check, postal money orders, bank drafts and treasury warrants.

Answer 4

CASH

Question 5

TWO TYPES OF CASH

Answer 5

• Cash on Hand (Cash is within the business)
• Cash in Bank (deposited in the bank)

Question 6

CURRENT ASSESTS: the account title for money placed and set aside for petty or small expenses.

Answer 6

Petty Cash Fund

Question 7

CURRENT ASSESTS: short-term, highly liquid instruments that are readily convertible into cash and they present insignificant risk of changes in values because of changes in interest rates.

Answer 7

Cash Equivalents

Question 8

CURRENT ASSESTS: this is a promissory note that is received by the business from the customer arising from rendering of services, sales of merchandise.

Answer 8

Notes Receivable

Question 9

CURRENT ASSESTS: the account title for amounts collectible arising services rendered to a customer or client on credit or sale of goods to customers on accounts. This constitutes an oral or verbal promise to pay by a customer or client.

Answer 9

Accounts Receivable

Question 10

CURRENT ASSESTS: this is an “asset offset” account. It provides for possible looses from uncollected accounts.

Answer 10

Allowance for Bad Debts

Question 11

CURRENT ASSESTS: the amount of interest earned on a Notes Receivable which is not yet collected.

Answer 11

Accrued Interest Income

Question 12

CURRENT ASSESTS: the account title for amounts collectible from employees for allowing them to make cash advances which are deductible against their salaries or wages.

Answer 12

Advances to Employee

Question 13

CURRENT ASSESTS: these are assets which are (1) held for sale in the ordinary course of business (2) in the process of production for such sale; or (3) in the form of materials or supplies to be consumed in the production process or in the rendering of services.

Answer 13

Inventories

Question 14

CURRENT ASSESTS: account title for expenses that are paid in advance but are not yet incurred or have not yet expired such as Prepaid Rental, Prepaid Insurance, Prepaid Interest, and Prepaid Advertising.

Answer 14

Prepaid Expenses

Question 15

CURRENT ASSESTS: an account title for a cost of stationery and other supplies purchased for use but are left of hand and still unused.

Answer 15

Unused Supplies

Question 16

BALANCE SHEET ACCOUNTS (PERMANENT ACCOUNTS): All other assets not classified as current should be classified as non-current assets. These accounts are normally arranged according to “liquidity”

Answer 16

Non-Current Assets

Question 17

NON-CURRENT ASSET: property and equipment defined as “tangible assets which are held by an enterprise for use in production or supply of goods and services, for rental to others, or for administrative purposes, and are expected to be used during more than one period.

Answer 17

Property and Equipment

Question 18

NON-CURRENT ASSET: account title for finished construction owned by the business where operations and transactions took place.

Answer 18

Building-

Question 19

NON-CURRENT ASSET: an account title for the site where the building used as office or store is constructed.

Answer 19

Land

Question 20

NON-CURRENT ASSET: includes calculator, typewriters , adding machines, computers, steel filing cabinets and the like.

Answer 20

Equipment

Question 21

NON-CURRENT ASSET: includes chairs, tables, counters, display cases and the likes.

Answer 21

Furniture and Fixtures

Question 22

NON-CURRENT ASSET: this is an “asset offset” This is called a “Valuation Account” which is shown as a deduction from property and equipment.

Answer 22

Accumulated Depreciation

Question 23

NON-CURRENT ASSET: these are identifiable non-monetary assets without physical substance.

Answer 23

Intangible Assets

Question 24

Examples of Intangible Assets

Answer 24

patents, copyrights, franchises, trademarks, goodwill and others

Question 25

BALANCE SHEET ACCOUNTS (PERMANENT ACCOUNTS): are financial obligations of the enterprise which are (1) expected to be settled in the normal course of the operating cycle; (2) due to be settled within one year from the balance sheet date.

Answer 25

Current Liabilities

Question 26

CURRENT LIABILITIES: an account title for a financial obligation of an enterprise that constitutes and oral or verbal promise pay.

Answer 26

Accounts Payable

Question 27

CURRENT LIABILITIES: same as account payable in nature but only the obligation is evidenced by promissory note. The enterprise is the one who issued the note.

Answer 27

Notes Payable( short-term)

Question 28

CURRENT LIABILITIES: these are expenses incurred by the enterprise but are not yet paid. This normally occurs when the accounting period ended such as rent, salaries, interest, taxes payable.

Answer 28

Accrued Expenses

Question 29

CURRENT LIABILITIES: refers to the amount due and payable by the enterprise to the Social Security System.

Answer 29

SSS Premium Payable

Question 30

CURRENT LIABILITIES: refers to the amount due and payable by the enterprise to the Philippine Health Insurance Corporation.

Answer 30

Phil health Premium Payable

Question 31

CURRENT LIABILITIES: refers to the amount due and payable by the enterprise to the Home Development Mutual Fund.

Answer 31

Pag-ibig Premium Payable

Question 32

CURRENT LIABILITIES: Refers to the amount due and payable by the enterprise to the Bureau of Internal Revenue for the tax withheld from employees.

Answer 32

Withholding Tax Payable

Question 33

CURRENT LIABILITIES: this is an account title for a income collected or received in advance and is not yet considered as “earned”.

Answer 33

Pre-collected or Unearned Income

Question 34

BALANCE SHEET ACCOUNTS (PERMANENT ACCOUNTS): are financial long term obligations of the enterprise which are due and payable for more than one year.

Answer 34

Non-Current Liabilities

Question 35

NON-CURRENT LIABILITIES: same nature which that of Notes Payable(short-time) but only, this requires payment for more than a year.

Answer 35

Notes Payable (long term)

Question 36

NON-CURRENT LIABILITIES: a financial obligation of the enterprise which requires a fixed or tangible property to be pledged as a collateral to ensure payment.

Answer 36

Mortgage Payable

Question 37

OWNER’S EQUITY: this is the center of the owner’s concern because this may increase or decrease at anytime as a result of business operation.

Answer 37

Capital

Question 38

OWNER’S EQUITY: this is a temporary account created at the end of the accounting period where Income and Expenses are temporarily closed to this account.

Answer 38

Income and Expense Summary