are original written evidences that contain information regarding the transactions or events.

represents collectibles from customers or clients arising from sale of goods or services which are supported by promissory notes executed by the customers.

refers to the span of time from the point of acquisition of goods or materials for processing up to the realization in cash or cash equivalents

Represents the residual interest of the owner in the assets of the business after deducting all its liabilities. In other words, it represents what is left to the business after all the liabilities are fully paid. Right or claims of the owner over the assets of the business

used for bank loans with a maturity period or a term longer than one year. These loans are typically used for commercial or industrial purposes. Commercial loans support working capital or business expansion, while industrial loans fund specific industries like mining, fishing, manufacturing, or logging.

are present obligations of the entity arising from past events which are expected to result in an outflow of resources from the entity-that do not meet the criteria of current liabilities.

represents what a business owes to utility companies for using services like electricity, water, and gas. Any unpaid utility bills at the end of the accounting period are recorded under

represents the cost of stationery, paper, pencil, ink and other related supplies purchased and used, but still on hand at the end of the accounting period. In other words, the account refers to unused supplies. Sometimes, in order to be more descriptive of the nature and use of the supplies, a word is placed before supplies to denote its purpos

a listing of accounts with open balances. It verifies the equality of debits and credits in the ledger.

are collectibles that arise from the nature of business operation like sale of goods or services.

is a statement of financial position in a trial balance form. It is made to verify the equality of debits and credits after closing the nominal accounts.

shows the part of a debt or loan that won't be paid off within a year from the financial statement date. This title is used when a portion of a long-term debt matures within a year, and it's separated from the total long-term debt. The remaining balance, not due within a year, is called the

refers to a device that summarizes business transactions and events.

It comes from the Latin word credo which means trust or belief in the proprietor or owed by the proprietor.

ground rules for debit and credit as follows:

represents collectibles from customers arising from credit sale of goods or services, and not supported by promissory notes. This account is similar to notes receivable since it represents collectible amounts. However, account receivable is an "open account"because it is not supported by a promissory note.

Goods that are intended for sale to the customers are called

represents money placed and set aside for "petty" or small expenses. Usually, the establishment of this fund happens with the business operates under the imprest fund system.

It comes from the Latin word debita or debeo which means owed to the proprietor.

the title for the money a business owes for services, goods, or items bought on credit. It's a general account that includes all these obligations from different suppliers or creditors. Unlike debts supported by promissory notes, this accounts are "open account" obligations.

are assets held by the business entity for the purpose of accumulating wealth through capital distribution such as interest, royalties, dividends, or rentals.

In the partnership form of business organization, the capital is called and in a corporate entity it is called

is like a savings account that reduces the value of property and equipment (excluding land) over time due to wear and tear. When a business buys machinery, it's not an immediate expense but a conversion of cash into another asset. As the machinery gets used, its value decreases,

Some adjusting entries are reversed on the first day of the next accounting period to facilitate and simplify the recording process of the following period.

commercial document that indicates payment or receipt of cash. Impliedly, the goods or services have already been delivered or rendered

commercial business document issued by the seller to the buyer.

involves the mechanical and routine process of writing business transactions in the journal. The Journal is also called the Book of Original Entry. A business entity may use general journal or special journal to record the various business transactions for the first time.

is money received upfront for goods or services that haven't been provided yet. It's also known as Pre Collected Income. Because payment has been received but services aren't yet delivered, there's a liability for future services, typically after the financial statement date.

it's backed by a promissory note from the business to the creditor or supplier. These notes can come from regular business activities or from other less common actions.

shows a long-term debt secured by collateral, usually property. The collateral acts as a safety net if the borrower can't repay. If the debt isn't settled after a grace period, the lender may foreclose on the property. It is like Bank Loan Payable, but the difference is that it is backed by collateral while bank loan payable is supported with promissory notes

is an "asset offset" or "contra-asset" account which provides for possible losses from uncollected accounts receivable. This account title is also called Allowance for Doubtful Accounts.

Noncurrent assets that cannot be properly classified (either as property, plant, and equipment; long-term investments; or intangibles) are presented as Example 1. long-term advances to officers and employees 2. long-term advances to directors and stockholders 3. long-term refundable deposits 4. abandoned property, plant, and equipment

represents when the owner temporarily takes money out of the business for personal use. I

These advances are typically deducted from the recipients' salaries. To be considered a current asset, these advances should be repayable within one year, regardless of the business's normal operating cycle.

involves basic recording and compliance with accounting standards accounting for sole proprietorships is covered, including service concerns and merchandising. This phase strictly follows accounting frameworks and standards.

This account title represents the amount withheld from the salaries of employees and the employer's unremitted share contribution to the Social Security System (SSS).

reducing the value of accounts receivable on the balance sheet. This allowance is necessary because not all credit extended by a business is collected due to various reasons like debtor death or bankruptcy.

Nominal accounts, otherwise known as temporary accounts, are closed at the end of the accounting period. Nominal accounts are only used for a particular period, and they are closed at the end of such period. The closing of nominal accounts is done through the preparation of closing entries.

shows the money withheld from employees' salaries and the employer's share for the Home Development Mutual Fund (Pag-IBIG). Pag-IBIG helps employees with housing needs. This account title is similar to PhilHealth premium payable in the accounting recording process.

is the money taken from employees' salaries for income tax purposes. In the Philippines, income tax law requires employers to withhold tax from employees' salaries for easier tax payment. Employers act as withholding agents and must remit the withheld amount through authorized banks.

are properties or resources controlled by the business not classified as current assets as a result of past events and from which future economic benefits are expected to flow to the entity.

refers to the transfer of information from the journal to the ledger. The Ledger is also known as the Book of Final Entry.

Goodwill is considered as

refer to identifiable nonmonetary assets without physical substance that are controlled by the entity as a result of past events, and from which future economic benefits are expected to flow to the entity. Examples: 1. copyright 2 patent 3. franchise 4. trademark 5. lease right 6. formula 7. computer software

the wages that employees have earned but haven't been paid yet at the time of preparing financial statements. It's used during adjusting entries at the end of the accounting period because the payment date for salaries often differs from the date of the financial statements.

involves finding measurable transactions or events using supporting documents like invoices, receipts, and vouchers. These documents provide evidence of transactions, ensuring the reliability of accounting records. Only measurable business transactions affecting assets, liabilities, and capital should be recorded in the books.

is a tool used by accountants to facilitate the preparation of adjusting entries and the financial statements

represents the owner's initial investment when starting the business or the starting capital for subsequent years.

an official business document issued by the buyer to the seller of goods

are the final product of accounting. The operating performance and financial condition of the business entity are communicated to various interested users through the financial statements

The expanded equation of the capital of the owner will appear as follows: The expanded form of the basic accounting equation will appear as follows;

This account title shows the money a business owes to banks and other financial institutions. When a business borrows money for things like working capital or investments, it creates a debt that needs to be repaid later. Since this debt specifically comes from bank borrowing, it's called

account title that describes money, either in paper or coins. This also includes money substitutes. Examples of money substitutes are checks, postal money orders, bank drafts, and treasury warrants. The company may maintain two types of cash.

the title for interest owed to banks or other lenders due to borrowing money. Typically, it's used when updating accounts at the end of the accounting period to show the business's financial state

refers to the series of sequential steps or procedures performed to accomplish the purpose of accounting.

is good will a identifiable or unidentifiable?

document used within the business upon receipt of the goods shipped by courier or forwarder. This document is prepared by the person receiving the goods

are intended to reflect the accruals, expiration of deferrals, estimation, and other events that will update the account to its present balance. This type of journal entry is usually made at the end of the accounting period.

the daily collections are deposited intact the following day, and all disbursements are made through the issuance of checks. Hence, when the business settles its financial obligation to suppliers, it issues check.

that are paid in advance but not yet incurred or remain unexpired at the end of the period. In other words, the business has paid the expense in advance but was not able to utilize it at the end of the period.

involves interpreting financial data for future planning -involves using various tools to interpret financial performance and plan for future business endeavors.

represents the part of the asset acquired through a finance lease that the lessee is responsible for. There are two types of leases in accounting: operating leases and finance leases. In an operating lease, the lessee pays rent for the property. It's similar to ordinary rent. In a finance lease, the lessee's payments cover both rent and partial ownership of the property.Essentially, the lessee is buying the lessor's property indirectly. At the end of the lease term, the property becomes the lessee's.

are resources controlled by the enterprise as a result of past transactions or events, and from which future economic benefits are expected to flow to the enterprise. are properties or rights to the property owned by the business with future economic benefits.

It's calculated by multiplying the borrowed principal, time period, and interest rate. This account is updated at the end of the accounting period to reflect the business's actual position. Typically part of current assets, it represents interest due before the debt matures.

are present obligations of the enterprise arising from past transactions or events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits

document that orders the payment of money from the current account maintained in the bank. There are three persons involved in the issuance and payment of a check. They are the drawer, the drawee, and the payee.

document that serves as evidence that the goods or services have been received.

The drawer makes the order of payment. Usually, the drawer maintains a current account in the bank. The drawee, usually a bank, makes the payment according to the order of the drawer. The payee is the person receiving the payment on account of goods sold or services delivered.