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