LESSON 3.3

39問 • 1年前

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– are resources owned and controlled by the firm/company.

Assets

– are assets that can be realized (collected, sold, used up) within one year from the reporting date or the normal operating cycle, whichever is longer.

Current Assets

– is money on hand, or in banks, and other items considered as medium of exchange in business transactions.

Cash

– are amounts due from customers arising from credit sales or credit services.

Accounts Receivable

– are amounts due from clients supported by promissory notes

Notes Receivable

– are assets held for sale

Inventories

contains the company’s investments in low-risk, highly liquid assets such as bonds and stocks, which are expected to be liquidated in less than a year.

Short-term Investments

– are items purchased by an enterprise which are unused as of the reporting date.

Unused Supplies

– are expenses paid in advance. They are assets at the time of payment and become expenses through the passage of time.

Prepaid Expenses

– are assets that cannot be realized (collected, sold, used up) within one year from the reporting date or the normal operating cycle of the business whichever is longer.

Non-current Assets

These are the company’s investments which you do not expect to realize within 1 year. Investment accounts such as real estate, long-term notes, government treasury bills, and funds that are set aside for long-term purposes.

Long-Term Investments

These assets are the most tangible of all assets. They cannot be converted into cash since they are regularly placed as means of production. The following are the examples of fixed assets:

Fixed Assets

- are obligations of the firm arising from past events which are to be settled in the future.

Liabilities

– are liabilities that are expected to be settled by payment of cash, delivery of goods, refinancing or performance of service within its normal operating cycle or within one year from the reporting date, whichever is longer.

Current Liabilities

-this represents the amount of money owed by the business to creditors or suppliers.

Accounts Payable

- this represents the amount of money owed by the business to the supplier or creditor evidenced by a promissory note.

Notes Payable

– this represents services or benefits received by the company but not yet paid.

Accrued liabilities

– this represents cash collected by the business in advance for services or goods that are yet to be rendered or delivered.

Unearned Revenue

– obligations expected to settle beyond one year.

Non-Current Liabilities

– this represents the amount of money borrowed by the business from third party creditors.

Long-Term Loan Payable

– this represents the amount of money borrowed by the business from a bank or a lending institution which is secured by collateral.

Mortgage Payable

– are owner’s claims in the business. It is the residual interest in the assets of the company after deducting all its liabilities from assets.

Equity or Owner’s Equity

– is the value of cash and other assets invested in the business by the owner of the business.

Capital

– is an account debited for assets withdrawn by the owner for personal use from the business.

Drawing

– are the earnings arising from the main line of operations of the business.

Revenues

– this refers to the earnings made by any business that is into rendering services. The term “revenue” is used not “income” to distinguish that such an earning arises from the main line of operations of the business.

Service Revenue

– this represents interest credited by the bank to the account of the business arising from bank deposits. Notice that the term “income” was used since earning interests from bank deposits is not the main line of operations of the business.

Interest Income

- this represents the earnings made by any business that is into selling goods or merchandise.

Sales Revenue

– this represents earnings made by professionals or experts from rendering services to their clients.

Professional Fees

- are the amount that a company consumed so that it can operate, or the costs incurred by the business in generating revenue.

Expenses

– this refers to costs associated with the usage of electricity, water and communication for a particular accounting period

Utilities Expense

– this refers to costs incurred associated with the services rendered normally by permanent and full-time employees who are paid on a regular basis, usually monthly

Salaries Expense

- this refers to costs incurred associated with the services rendered normally by contractual and temporary employees and workers who are paid on an hourly rate or based on output.

Wage Expenses

– this represents cost incurred to register the business, to acquire the right to operate and to settle taxes

Taxes and Licenses Expense

-this refers to the cost of merchandise or goods that were sold during a particular accounting period

Cost of Sales

– this refers to the amount of supplies used during a particular accounting period.

Supplies Expense

– this refers to the amount of accounts receivable that is estimated as uncollectible and is recognized as an expense in the current accounting period.

Doubtful Accounts Expense

– this refers to the allocated portion of the cost of property, plant and equipment charge to expense in the current accounting period.

Depreciation Expense

this lack physical substance, yet they are realizable over long period of time.

Intangible Assets

2.1

Shekinah Bismonte · 58問 · 2年前

2.1