Scribd
Upload
14 views24 pages

Accounting - Lesson 3

Uploaded by

Chery Grin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
14 views24 pages

Accounting - Lesson 3

Uploaded by

Chery Grin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 24

Account Titles

Accounting – Lesson 3
Review:
Explain briefly the concept of Double-Entry Accounting Princ

2. What is the Accounting Equation?

3. Enumerate the 4 elements under the


Equity and their corresponding effect.
Asset = Liability + Equity
Owns = Owes + Interest/Cla
SALN
The Statement of Assets, Liabilities
& Net Worth
Objectives:
1.Enumerate the Elements of the
Accounting Equation;
2.Discuss the different Account
Titles; and
3.Identify the account title in
analyzing business transaction.
ASSET
Current Assets: are assets which
are expected to be realized within
the ordinary period of the business;
converted to cash, sold, or disposed
after a certain time or through the
passage of time.
Example:
Cash, Accounts Receivable, Short-term
investments, Notes Receivable,
Supplies/Inventories, Prepayments
ASSET
Noncurrent Assets: are assets
that do not have at least 12 months
before their expected realization.

Example:
Long-term investments, Fixed Assets,
Intangible Assets, Other Assets, Plants
Asset Account Titles
1. Cash includes currency, coins, checking
account balances, petty cash funds, and
customers' checks that have not yet been
deposited.
2. Short-term or temporary investments may
include certificates of deposit, bonds, notes, etc. that
will mature in less than one year.
* Long-term investments
3. Accounts receivable is a right to
receive an amount as the result of
delivering goods or services on credit.

4. Notes Receivable – receivables from


customers which are backed up by promissory
notes.
5. Inventory is the cost of goods that have
been purchased or manufactured and have
not yet been sold.

6. Supplies could be office supplies, manufacturing


supplies, packaging supplies or other supplies that
are on hand. The cost of the supplies that remain on
hand is reported as an asset.
7. Land: This account represents the property portion of
the balance sheet heading "Property, plant and
equipment." It reports the cost of land used in a
business. Since land is assumed to last indefinitely, the
cost of land is not depreciated.

8. Buildings: This account will report the cost of the


building used in the business. The cost of buildings will
be depreciated over their useful lives.
9. Vehicles: This account reports
the cost of trucks, trailers, and automobiles
used in the business. The cost of vehicles
is to be depreciated over the vehicles'
useful lives.
10. Equipment: This account reports the cost of the
machinery and equipment used in the business. The
cost of equipment will be depreciated over the
equipment's useful life.
11. Furniture and Fixtures: This account reports
the cost of desks, chairs, shelving, etc. that are used
in the business. The cost of furniture and fixtures is to
be depreciated over the useful lives.

12. Prepaid Expenses: These are future


expenses that have already been paid. The
amounts appear as assets until the costs have
been used up or expire.
Identify the Account Element & Titles in the ff. transactions.
Sept. 1: Purchased white board markers amounting
to P300.
Sept. 3: Purchased 2 laptop units amounting to
P80,000.
Sept. 5: Purchased papers clips amounting to P150.
Sept. 7: Purchased 3 air-condition units amounting
to P70,000.
Liability Account Titles
1. Accounts Payable – refers to obligations that
arise from purchase of goods, materials, supplies or
services and other transaction tin the normal course
of the business.
2. Notes Payable – obligations that are evidenced
by promissory notes.

* Long-term Payables
3. Income Tax Payable – current income tax
obligation of the company payable to the government.

4. Withholding Tax Payable – includes wage


taxes withheld from employees that will be
remitted to the appropriate government agency.
**Social Security Payable and Medical Payable
Equity Account Titles
1. Capital - capital refers to anything that a business
or business owner can use to generate more value.

2. Service income – revenue earned from rendering


services; Professional fees or Tuition Fees

3. Sales – revenue from selling goods to customers.


4. Rent income – earned from leasing out commercial
spaces such as office space, stalls, booths,
apartments, condominiums, etc.

5. Interest Income – revenue earned from


lending money.

6. Commission income – earned by brokers


and sales agents
7. Royalty Income – earned by the owner of a
property, patent, or copyrighted work for allowing
others to use such in generating revenue.

8. Franchise Fee – earned by a franchisor in a


franchise agreement.
9. Cost of Sales – “Cost of goods sold”; represents the
value of the items sold to customers before any mark-up.

10. Advertising Expense – costs of promoting the


business such as newspaper publications, television and
radio broadcasts, billboards, flyers, etc.

11. Bank Service Charge – costs charged by bank for


the use of their services.
12. Delivery Expense – represents cost of gas, oil,
courier fees and other costs incurred by the business in
transporting the goods sold to customers; Freight-out.
13. Depreciation Expense – refers to the portion of the
cost of fixed asset used for the operations of the period
reported. (e.g. equipment)
14. Insurance Expense –insurance premiums paid or
payable to an insurance company who accepts to
guarantee the business against losses from a specified
event.
15. Rent Expense – cost paid or to be paid to a lessor
for the right to use a commercial property.

16. Repairs and Maintenance Expense – cost of


repairing and servicing certain assets such as building,
facilities, machinery an equipment.

17. Representation Expense – entertainment cost for


customers, employees and owners. It is often couped
with traveling; Travel & Representation Expense.
18. Salaries Expense – compensation to employees for
their services rendered to the company; Wage Expense

19. Supplies Expense – costs of supplies used by the


business.

20. License Fees and Taxes – business taxes,


registration and licensing fees to be paid to the
government.
21. Telecommunications Expense – cost of using
communication and telephony technologies such as
mobile phones, land lines, and internet.
22. Training and Development Expense – costs for the
enhancement of employees skills
23. Utilities Expense – water and electricity costs paid
or payable to the utility companies
24. Drawing - accounting record maintained to track
money and other assets withdrawn from a business by
its owners.

You might also like