account titles

Question 1

is anything that has current or future economic value to a business.

Answer 1

Assets

Question 2

any amount paid as expense which is not significant enough to
warrant a particular classification.

Answer 2

Miscellaneous Expense

Question 3

refer to all assets that are expected to be realized, sold or consumed within the enterprise’s normal operation cycle. Operating cycle 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

current assets

Question 4

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

Answer 4

Petty Cash Fund

Question 5

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. When cash is within the premise of the business, the account title is “Cash on Hand” and
“Cash in Bank” if deposited in the bank.

Answer 5

cash

Question 6

is defined as 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 6

Cash Equivalents

Question 7

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 on oral or verbal promise to pay by a customer or client.

Answer 7

accounts receivable

Question 8

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 10

this is an “asset offset”account. It provides for possible looses from uncollected accounts. Although this is not actually an asset, it is classified as such because it is shown as a deduction from the Accounts Receivable which is a Current Asset Account.

Answer 10

Allowance for bad debts

Question 11

the amount of interest earned on a Notes Receivable which is not yet collected. (If the note is interest-bearing).

Answer 11

Accrued Interest Income

Question 12

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

Answer 12

Prepaid Expense

Question 13

on account title for a cost of stationery and other supplios purchased for use but are left of hand and still unused. The account title should be specified as to “Unused Office Supplies” in intended for the office, “Unused Shop Supplies” if intended for the shop, etc.

Answer 13

Unused supplies

Question 14

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

Answer 14

Advances to employee

Question 15

account title for finished construction owned by the business where operations and transactions took place.

Answer 15

Building

Question 16

an account title for the site where the building used as office or store is constructed.

Answer 16

Land

Question 17

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

includes chairs, tables, counters, display cases and the likes. If these are used in the office, the account title is “Office Furniture and Fixtures” and if these are used in the store, the account title is “Store Furniture and Fixtures”.

Answer 18

Furniture and Fixtures

Question 19

includes calculator, typewriters, adding machines, computers, steel filing cabinets and the like. If these are used in the office, the account title is “Office Equipment”

Answer 19

equipment

Question 20

these are identifiable non-monetary assets without physical substance.

Answer 20

intangible assets

Question 21

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

Answer 21

Accumulated Depreciation

Question 22

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 22

notes payable short term

Question 23

these are expenses incurred by the enterprise but are not yet poid. This normally occurs when the accounting period ended such as rent, salaries, interest, taxes poyable.

Answer 23

Accrued expenses

Question 24

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

Answer 24

accounts payable

Question 25

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

Answer 25

unearned income

Question 26

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

Answer 26

notes payable long term

Question 27

refers to the amount due and payable by the enterprise to the Bureau of Internal Revenue for the tax withheld from employees.

Answer 27

Withholding tax Payable

Question 28

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

Answer 28

mortgage payable

Question 29

this is the center of the owner’s concern because this may increase or decrease at anytime as a result of business operation. In the normal course of operation, Owner’s Equity will be increased by “income” and decreased by “expenses.”

Answer 29

capital

Question 30

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

Answer 30

income and expense summary

Question 31

those accounts
that are used in a firm’s profit and loss
statement. These accounts are usually
positioned in the general ledger after the
accounts used to compile the balance sheet.

Answer 31

Income Statement accounts

Question 32

this is the account an income that is drawn by providing various professional
services such as consulting, technical, or other services as part of a profession, trade or business.

Answer 32

service income

Question 33

this represents revenue derived from the sale of merchandise.

Answer 33

sales

Question 34

for income earned on buildings, space or other properties owned and rented out by the business as the main line of its activity.

Answer 34

rental income

Question 35

the account title generally used by professionals for income
earned from the practice of their profession.

Answer 35

professional income

Question 36

for income earned by the business which is not the main line of its activity.

Answer 36

miscellaneous income

Question 37

refers to direct costs in companies that make a product.

Answer 37

COST OF GOOD SOLD

Question 38

for income received by the business arising from an amount of money borrowed by a customer and is usually covered by a promissory note.

Answer 38

interest income

Question 39

is the total amount a business accumulates (accrues) in interest on its loans. It’s the cost of borrowing funds, in short. Businesses take out loans to add inventory, buy property or equipment or pay.

Answer 39

interest expense

Question 40

is the term for direct costs when a business doesn’t make products, such as a retailer or wholesaler

Answer 40

Cost of sales

Question 41

for expenses incurred in repairing or servicing
the buildings, machineries, vehicles and equipment which are owned by the business.

Answer 41

repairs and maintenance expense

Question 42

the cost incurred by a business to utilize a property or location for an
office, retail space, factory, or storage space.

Answer 42

rent expense

Question 43

for compensation given to employees of a business. It may be specified as “Office Salaries” or , “Salesmen’s Salaries”.

Answer 43

salaries expense

Question 44

an accounting entry that lists the amount of receivables your company does not expect to collect.

Answer 44

bad debts expense

Question 45

the stationery, envelopes, clips, fasteners and etc.. used in the office will bear the account title as “Office Supplies”. If use in the store “Store Supplies” or another title may be used to describe the kind of supplies used.

Answer 45

stationary and office supplies expense

Question 46

Amounts paid for taxes and licenses related to your business
and other government dues.

Answer 46

taxes and licenses expense

Question 47

is the amount that a company’s assets are depreciated for a
single period ( quarter or the year).

Answer 47

depreciation expense

Question 48

is the cost incurred by using utilities such as electricity, water, waste disposal, heating, and sewage.

Answer 48

utilities expense

Question 49

any amount paid as expense which is not significant enough to
warrant a particular classification.

Answer 49

miscellaneous expense

Question 50

the amount that a company pays to get an insurance contract and any additional premium payments.

Answer 50

insurance expense