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Fabm Assignment (1)

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7 views

Fabm Assignment (1)

Uploaded by

chasmagneheartnavarez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Kazumi M.

Viray
12- GAS
FABM2

1. Assets (Normal Balance: Debit)

Assets are resources owned by a business that have economic value. They are used to
generate income or support operations.

Cash: Money in hand or in the bank that is readily available for use.

Accounts Receivable: Money owed by customers for goods or services provided on


credit.

Inventory: Goods or materials the company holds for sale or use in production.

Prepaid Expenses: Payments made in advance for services or benefits to be received


later

Property, Plant, and Equipment (PPE): Long-term assets used in operations, like land,
buildings, and machinery.

Accumulated Depreciation (Contra Asset): The total amount of depreciation expense


allocated to an asset over its life. This reduces the asset's book value.

2. Liabilities (Normal Balance: Credit)

Liabilities are obligations or debts a business owes to outsiders, which will require
settlement in the future.

Accounts Payable: Amounts owed to suppliers for goods or services received but not
yet paid.

Notes Payable: Formal written agreements to repay borrowed funds, often with
interest.

Accrued Expenses: Expenses incurred but not yet paid, such as salaries or utilities.

Unearned Revenue: Money received from customers for services or products yet to be
delivered.

Bonds Payable: Long-term debt issued to investors, which must be repaid with
interest.

3. Equity (Normal Balance: Credit)


Equity represents the owner's claim on the business's assets after liabilities are settled.
It reflects the residual interest in the company.

Capital or Owner's Equity: Contributions made by the owner(s) or shareholders to the


business.

Retained Earnings: Accumulated profits that are reinvested in the business instead of
being distributed as dividends.

Common Stock: Ownership shares issued to investors in exchange for funds.

Preferred Stock: Shares that have preferential rights over common stock, like fixed
dividends.

Treasury Stock (Contra Equity): Shares repurchased by the company, reducing equity

4. Revenue (Normal Balance: Credit)

Revenue accounts record the income earned from business activities.

Sales Revenue: Income from selling goods.

Service Revenue: Income from providing services.

Interest Income: Earnings from interest on investments or loans given.

Dividend Income: Earnings from dividends on investments in other companies.

5. Expenses (Normal Balance: Debit)

Expense accounts record the costs incurred to operate the business and generate
revenue.

Cost of Goods Sold (COGS): The cost of producing or purchasing the goods sold by
the business.

Salaries Expense: Payments made to employees for their work.

Rent Expense: Costs of renting facilities or equipment.

Utilities Expense: Costs of electricity, water, and other utilities.

Depreciation Expense: The allocation of an asset’s cost over its useful life.

Interest Expense: The cost of borrowing funds, such as loan interest.


6. Drawings or Withdrawals (Normal Balance: Debit)

This account is specific to sole proprietorships or partnerships and records


withdrawals of cash or assets by the owner(s) for personal use.

Owner's Drawings: Reduces the owner’s equity in the business when assets are taken
out for personal purposes.

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