Semis Flashcards
are identifications of brief descriptions of
items that fall to same kind, class or nature. In recording business transactions, the elements of financial statements which re better known as “accounting elements” or “accounting values” are to be assigned with their individual names called “account titles”.
Account titles
is anything that has current or future economic value to a business. Assets are classified only into two, namely: Current assets and Non-current assets.
Assets
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.
Current Assets
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.
Cash-
the account title for money placed and set aside for petty or small
expenses.
Petty Cash Fund
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.
Cash Equivalents
this is a promissory note that is received by the business from the
customer arising from rendering of services, sales of merchandise.
Notes Receivable
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.
Accounts Receivable
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.
Allowance for Bad Debts
the amount of interest earned on a Notes Receivable which
is not yet collected. ( If the note is interest-bearing).
Accrued Interest Income
the account title for amounts collectible from employees for
allowing them to make cash advances which are deductible against their salaries or
wages.
Advances to Employee
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.
Inventories
account title for expenses that are paid in advance but are not yet
incurred or have not yet expired
Prepaid Expenses
an account title for a cost of stationery and other supplies
purchased for use but are left of hand and still unused.
Unused Supplies
All other assets not classified as current should be classified as? These accounts are normally arranged according to “liquidity”
(ready conversion to cash).
Non-Current Assets
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.
Property and Equipment
