accounting

bonds payable

a bond is a contract between thr issuer and the lender specifying the terms of repayment as well as the interest to be paid

trade notes receivable

a note receivables is a written promisr from the customer to pay fixed amount of money on a certain future date. being a formal and written document, it offers more security than accounts receivable

contra account

allows a company to continue to report the original amount (or the gross amount) and to also report the carrying amount (or net amount)

bad debts expense

also known as "uncollectible accounts expense"

interest expense

an expense related to use of borrowed funds. also known as finance cost

long-term investments

an investment is an asset held by an enterprise for the accretion of wealth through capital fistribution, such as interest, royalties, dividends and rentals, for capital appreciation or for other benefits to the investing enterprise such as those obtained through trading relationships

prepaid expenses

are assets when they are paid for. subsequently, they become expenses

trade receivables

are claims against others which arise in the ordinary course of doing business

liability

arises from past transaction or event

accumulated depreciation

associated with property, plant, and equipment and it is credited when deprrciation expense is recorded

long-term investments

classifies as long tern when they are intended to be hwld for long periods of time

liabilities

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

rent expense

expense for leased office space, equipment, or other assets rented from others

utilities expense

expenses related to use of communication facilities, the consumption of electricity and water

cost of services

for a service business, any expense which could be directly attributed to the provision of servuces

net income

if total income is greater than total expenses

net loss

if total inconme is less than total expenses

accounts receivables

include trade receivables and non trade receivables

salaries and wages expense

includes all payments as a result of an employer-employee relationship such as salaries and wages, 13th month pay and other related employee benefits

cash

includes currency and coins, checks, money orders, bank drafts and demand deposit accounts

contra account

is a general ledger account which is intended to have its bakance be the opposite of the normal balance for tgat account classification

noncurrent assets

is a residual definition. PAS 1, paragraph 66, simply states that "an entity shall classify all other assets not classified as current as noncurrent"

noncurrent liabilities

is also a residual definition. PAS 1, paragraph 69, provides that all liabilities not classifies as current are classified as noncurrent

contra asset account

is intended to have a crediy balance instead of the debit balance normally found in an asset account

contra revenue account

is intended to have a debit balancr instead of the credit balance normally found in a revenue account

notes payable

is like a note receivabke, except that this time the enterprise is the one who promises to pay (not the one who receives the promise)

liability

is the present obligation of a particular entity

equity or capital

is used to record the original and additional investments of the owner of the business entity. it is incresse by net income earned during the year. conversely, a net loss decreades capital

income summary

it is tempoeary account used to summarize all income and expenses for a given period.

cash equivalents

per PAS no. 7, these are short term, highly liquid investments that are readily convertible to known amount of cash and which are primarily held for short term gain

insurance expense

portions of premiums paid on insurance coverage whuch has expired

settlement of the liabilitt

requires an outflow of resources embodying economic benefits

sales

revenues earned as a result of sale of merchandise

service income or fees income

revenues earned by performing services for customers

unearned revenues

sometimes the enterprise receives payment before providing its customers with goods or services. this creates an obligation on the part of tge enterprise to deliver good or rovide services. once the enterprise complies with what is required of it, the advance collections from customers are already earned and become part of income

held for trading securities

temporary investments of excess cash which are primarily held for short term gain

owner's equity in proprietorship partners' equity in a partnership stockholder's equity or shareholders' equity in a corporation

term used in reporting the equitt of an entity depending on the form of the business organization

supplies expense

the account used for recording the usage of supplies in the normal course of business

bad debts expense

the amount of receivables estimated to be uncollectobke and charged as expense during an accounting period

cost of sales

the cost incurred to purchaee or to produce the products sold to customers during the period

discount on notes receivable

the credit balance in this account is amortized or allocated to interest income or interest revenue over the life of a note receivable

current liabilities

the entity does not have an unconditional right to defer settlement pf tge liability for at least twelve months after the reporting period

current liabilities

the entity expects to settle the liability within the entity's normal operating cycle

current liabilities

the entity holds the liability primarily for the purpose of trading

current liabilities

the liability is due to be settled within twelve months after the reporting period

depreciation expense

the portion of the cost of a tangible asset allocated or charged as expense during the accounting period

equity (net worth)

the term is the residual interest in the assets of an entity after deducting all its liabilities. it means "net assets" or total assers minus liabilities

accrued liabilities

these are amounts owed to others for unpaid expenses. they are similar to accounts payable, except that accounts payabke are for items which have already been consummated (such as purchasing of goods), while accrued expenses are for items which are continuing in nature (such as utility services like electricity and water). examples are salaries payable, interest payable, taxes payable and accruals for utility expenses

inventories

these are assets whuch are (a) held for sale in the ordinary course of business; (b) in the process of production for such sale; (c) in the form of materials or supplies to be consumed in the production for such sales; (c) in the form of materials or supplies to be consumed in the production process or in the rendering of services

prepaid expenses

these are expenses paid for by the business in advance(prepaid rent and prepaid insurance)

property, plant, and equupment

these are tangible assets held by an enterprise for use in the production or supplt of goods or servuces, or for rental to others, or for administrative purposes and which are expected to be used during more rhan one accounting period such as land, building, transportation, and delivery vehicles, furniture and fixtures, machinery and equipment

intangible assets

these assets are identifiable, non monetary assets without physical substance that includes patents, copyrights, licenses, franchises, and trademarks

allowance for doubtful accounts

this account appears nexr to the current asset accounts receivable

accounts payable

this account is the opposite of accounts receivable that include purchasing goods or receiving services for whuch the buyer agrees to pay in the near futire

mortgage payable

this account is used for recording long-term debt(s) of an enterprise for which the company has pledged certain assets as security for the debt (collateral)

noncurrent assets

what is not included in the definition of current asset is deemed excluded. all others are classified as noncurrent assets

withdrawals

when the proprietor (or a partner in a partnership) withdraws cash or others assets for nin business use, such withdrawals are reflected in the "withdrawals" account. some accounting references use the term "drawings" or "personal" instead