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Activities For Fabm

This document defines and describes various types of current assets, non-current assets, liabilities, and equity accounts that are commonly used in accounting. Current assets include cash, accounts receivable, inventory, and prepaid expenses that are expected to be converted to cash within one year. Non-current assets are long-term assets not expected to be converted within a year. Common equity accounts include common stock and retained earnings, while liability accounts include accounts payable, notes payable, bonds payable, and accrued liabilities. The document provides examples of the types of items typically included in each of these accounts.

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Agnes Ramo
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376 views2 pages

Activities For Fabm

This document defines and describes various types of current assets, non-current assets, liabilities, and equity accounts that are commonly used in accounting. Current assets include cash, accounts receivable, inventory, and prepaid expenses that are expected to be converted to cash within one year. Non-current assets are long-term assets not expected to be converted within a year. Common equity accounts include common stock and retained earnings, while liability accounts include accounts payable, notes payable, bonds payable, and accrued liabilities. The document provides examples of the types of items typically included in each of these accounts.

Uploaded by

Agnes Ramo
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Current Assets

cash and other assets that are expected to be converted to cash within a year.
Non-Current Assets –
is an asset that is not likely to turn to unrestricted cash within one year. It is also referred
to as a long-term asset
Cash
includes coins, currencies, checks, bank deposits, and other cash items readily available
for use in the operations of the business.
Cash equivalents –
are short—term investments that are readily convertible to known amounts of cash which
are subject to an insignificant risk to changes in value (per SFAS No. 22, revised 2000).
Marketable securities
are stocks and bonds purchased by the enterprise and are to be held for only a short span
of time or duration. They are usually purchased when a business has excess cash.
accounts receivable —
amount collectible from the customer to whom sales have been made or services have
been rendered on account or credit
notes receivable —-
promissory note issued by the client or the customer in exchange for services or goods
received as evidence of his/her obligation to pay
accrued income —
income already earned but not yet received
Inventories
represent the unsold goods at the end of the accounting period. This is applicable only to
a merchandising business. ‘ "
Prepaid Expenses
include supplies bought for the businessior services and benefits to be received by the
business in the future paid in advance.
Capital
is an account bearing the name of the owner representing the original and additional
investment of the owner of the business.
Drawing
represents the withdrawals made by the owner of the business in cash or other assets.
Income Summary
is a temporary account used at the end of the accounting period to close income and
expense
Common Stock –
a security which represents ownership in a corporation
Preferred Stock
is a security which represents ownership in a corporation.
EXPENSE –
an amount consumed by the business to operate.
Retained Earnings – represents the accumulated net income from operation over several
periods.
ACCOUNTS PAYABLE
includes debts arising from the purchase of an asset or the acquisition of services on
account.
Notes payable
includes debts arising from the purchase of an asset or the acquisition of services on
account evidenced by a promissory note.
Mortgage payable
is a long-term debt of the business with security or collateral in the form of real
properties.
Bonds payable
is a certificate of indebtedness under the seal of a corporation, specifying the terms of
repayment and the rate of interest to be charged.
Unearned revenues
represent obligations of the business arising from advance payments received before
goods or services are provided to the customer.
Accrued liabilities
include amounts owed to others for expenses already incurred but are not yet paid.
Examples of these are salaries payable, utilities payable, taxes payable, and interest
payable.
land
a piece of lot or real estate
building
edifice or structure used to accommodate the office, store, or factory
equipment
includes typewriter, air-conditioner, calculator, filing cabinet, computer, electric fan,
trucks, and cars used by the business in its office, store, or factory.

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