Module 3 Flashcards
(50 cards)
This is the most basic tool of accounting and the equality of it must be maintained at all times because if not. there is an error.
Accounting equation
This is also known as the basic summary device. it the basic storage of information in accounting. It is a record of the increases and decreases in a specific item of asset, liability,equity,income or expense.
Account
An account may be represented through a __________” known as simplest form of account.
T-account
known as simplest form of account.
T-account
from the Latin word “debere”, the left side of the account or accounting equation.
Debit
from the Latin word credere, the right side of the account or accounting equation
Credit
Accounting is based on a ________________ which means that the dual effects of a business transaction are recorded
Double-entry system
Each transaction is recorded in two parts ______ and _______
Debit and Credit
No transaction is recorded by a ______ alone or a _______ alone.
Debit
Credit
For each amount that is ______, there must be a corresponding amount that is ________, and vice-versa
debited
credited
The total _____ for a transaction must always equal the total ______
debits
credits
the dual effects of a business transaction is recorded. A debit side entry must have a corresponding credit side entry. For every transaction, there must be one or more accounts debited and one or more accounts credited. Each transaction affects at least two accounts. The total debits for a transaction must always equal the total credits.
Double-Entry System
refers to the side of the account-debit or credit- where increases are recorded.
Normal Balance of An Account
This is an economic occurrence that causes changes in an enterprise’s assets, liabilities, and/or equity.
accounting event
This is a particular kind of event that involves the transfer of something of value between two entities.
transaction
This is any medium of exchange that a bank will accept for deposit at face value.
Cash
are readily convertible to known amounts of cash and which are subject to insignificant risk of changes in value.
Cash Equivalents
This is a written pledge that the customer will pay the business a fixed amount of money on a certain date.
Notes Receivable
These are claims against customers arising from sale of service or goods on credit. This offers less security than a promissory note
Accounts Receivable
Per PAS No. 2, these are assets which are (a) held for sale in the ordinary course of business; (b) in the process of production for such sale; or (c) in the form of materials or supplies to be consumed in the production process or in the rendering of services.
Inventories
hese are expenses paid for by the business in advance. It is an asset because the business avoids having to pay cash in the future for a specific expense. These include insurance and rent.
Prepaid Expenses
Per PAS No. 16, these are tangible assets that are held by an enterprise for use in the production or supply of goods or services, or for rental to others, or for administrative purposes and which are expected to be used during more than one period.
Property, Plant and Equipment.
It is a contra account that contains the sum of the periodic depreciation charges.
Accumulated Depreciation.
Per PAS No. 38, these are identifiable, nonmonetary assets without physical substance held for use in the production or supply of goods or services, for rental to others, or for administrative purposes. These include goodwill, patents, copyrights, licenses, franchises, trademarks, brand names, secret processes, subscription lists and non-competition agreements.
Intangible Assets.
