FABM Chapter 6: Types of Major Accounts

Question 1

basic storage of information in accounting

Answer 1

account

Question 2

three parts of T-Account

Answer 2

1. account title
2. debit side
3. credit side

Question 3

describes the specific item of asset, liability, equity, income or expense

Answer 3

account title

Question 4

the left side of the account

Answer 4

debit side

Question 5

the right side of the account

Answer 5

credit side

Question 6

it is sometimes referred to as “value parted with”

Answer 6

Credit

Question 7

it is sometimes referred to as the “value received”

Answer 7

debit

Question 8

the difference between the total debits and credits

Answer 8

Balance

Question 9

the five major accounts

Answer 9

1.assets
2.liabilities
3.equity
4.income
5.expenses

Question 10

economic resources you control that have resulted from past events and can provide you with future economic benefits

Answer 10

assets

Question 11

your present obligation that have resulted from past events and can require you to give up resources when settling them

Answer 11

liabilities

Question 12

assets minus liabilities

Answer 12

equity

Question 13

increases in economic benefits during the period in the form of increases in assets, or decreases in liabilities, that result in increases in equity

Answer 13

income

Question 14

2 income included

Answer 14

a. revenue
b. gains

Question 15

arises in the course of the ordinary activities of a business

Answer 15

revenue

Question 16

represent other items that meet the definition of income and may or may not arise in the course of the ordinary activities of the entity

Answer 16

gains

Question 17

decrease in economic benefits during the period in the form of decreases in assets, or increases in liabilities , that result in decreases in equity

Answer 17

expenses

Question 18

2 expenses included

Answer 18

a. expenses
b. losses

Question 19

represent other items that meet the definition of expenses and may or may not arise in the course of the ordinary activities of the entity

Answer 19

losses

Question 20

balance sheet accounts

Answer 20

1. assets
2. liabilities
3. equity

Question 21

income statement accounts

Answer 21

1. income
2. expenses

Question 22

it’s the financial statement that presents the assets, liabilities, and equity of a business

Answer 22

balance sheet

Question 23

it’s the financial statement that presents the income and expenses, and consequently the profit or loss of a business

Answer 23

income statement

Question 24

is a list of all the accounts used by a business

Answer 24

chart of accounts

Question 25

first digit signifies that this account is an ____

Answer 25

asset account

Question 26

second digits refer to ________ and the sequence on how they are listed in the chart of accounts

Answer 26

specific account title

Question 27

third digit signifies that the account is

Answer 27

contra account

Question 28

assets account titles

Answer 28

1. cash 2. accounts receivable 3. allowance for bad debts 4. notes receivable 5. inventory 6. prepaid supplies 7. prepaid rent 8. prepaid insurance 9. land 10. building

Question 29

liabilities

Answer 29

1.accounts payable 2. notes payable 3. interest payable 4. salaries payable 5. utilities payable 6. unearned income

Question 30

equity

Answer 30

1. owner's capital 2. owner's drawings 3.

Question 31

income

Answer 31

1. service fees 2. sales 3. interest income 4. gains

Question 32

expenses

Answer 32

1. cost of sales 2. freight-out 3. salaries expense 4. rent expense 5. supplies expense 6. losses

Question 33

includes money or it's equivalent that is readily available for unrestricted use

Answer 33

cash

Question 34

receivable supported by oral or informal promises

Answer 34

accounts receivable

Question 35

the aggregate amount of estimated losses from uncollectible accounts receivable

Answer 35

allowance for bad debts

Question 36

receivable supported by written or formal promises to pay in the form of promissory notes

Answer 36

notes receivable

Question 37

It is the obligations of the company payable in money, goods or services.

Answer 37

liabilities

Question 38

These are non-current tangible assets.

Answer 38

Property, Plant and Equipment

Question 39

These assets are identifiable, non-monetary assets without physical substance.

Answer 39

Intangible Assets

Question 40

It is the claim of the owner also known as the capital.

Answer 40

Owner’s Equity

Question 41

It is the most liquid asset and is the medium of exchange for business transactions.

Answer 41

Cash

Question 42

. It is an expense for leased office space, equipment or assets rented from others.

Answer 42

Rent Expense

Question 43

Examples of this are cash, account receivable and prepaid expenses.

Answer 43

Assets

Question 44

It is a written promise from the customer to pay his receivables on a certain future date.

Answer 44

Notes Receivable

Question 45

represent the goods that are held for sale by a business

Answer 45

inventory

Question 46

represent the cost of unused office and other supplies

Answer 46

prepaid supplies

Question 47

rent paid in advance

Answer 47

prepaid rent

Question 48

cost of insurance paid in advance

Answer 48

prepaid insurance

Question 49

total amount of depreciation expenses recognized since the building was acquired and made available for use

Answer 49

accumulated depreciation - building -

Question 50

total amount of depreciation expenses recognized since the equipment was acquired and made available for use

Answer 50

accumulated depreciation - equipment -

Question 51

interest incurred but not yet paid

Answer 51

interest payable

Question 52

salaries already earned by employees but not yet paid by the business

Answer 52

salaries payable

Question 53

utilities already used but not yet paid

Answer 53

utilities payable

Question 54

items related to income that were collected in advance before they are earned

Answer 54

unearned income

Question 55

residual amount after deducting liabilities from assets

Answer 55

owner's capital

Question 56

record the temporary withdrawals of the owner during the period

Answer 56

owner's drawings

Question 57

revenues earned from rendering services

Answer 57

service fees

Question 58

revenues earned from the sale of goods

Answer 58

sales

Question 59

revenues earned from the issuance of interest bearing receivable

Answer 59

interest income

Question 60

income earned from the sales of assets / enhancement of assets/ decreases in liabilities that are not classified as revenue

Answer 60

gains

Question 61

latin word of debit

Answer 61

debere

Question 62

asset of the company

Answer 62

trademark

Question 63

latin word of credit is

Answer 63

credere