John Carlo H.

Sionelo 11/14/19

ACCOUNTING
PRINCIPLES

JOHN CARLO H. SIONELO

JOHN PAUL CATUBIG
John Carlo H. Sionelo 11/14/19

 Accounting or Accountancy is the measurement, processing, and

communication of financial and non-financial information about economic
entities such as businesses and corporations.

 Income statement is the member of The Financial Statements that tells

fans whether or not a company made a profit or incurred a loss in an
accounting period. In everyday terms, the income statement tells whether
a company made money or lost money in a certain amount of time.

 Revenue is the money that a company takes in

 Expenses are the money that a company pays out

 Net income is the amount of money that is left after a company subtracts
their expenses from their revenue.

 balance sheet is the financial report that lists all of the accounts of a
company along with their balances. This report follows the formula: assets
= liabilities + owner's equity

 Assets are what a company owns

 Liabilities are what a company owes

 Owner's equity is how much money company owners have invested in

the business

 T-accounts are simply visuals to help accounting professionals see the

effects of transactions on accounts individually
John Carlo H. Sionelo 11/14/19

 Double-entry accounting requires that every business transaction be

recorded in at least two accounts. One account will be debited, and one
account will be credited

 Debit is an entry on the left side of the T-account that increases asset and
prepaid expense balances and decreases liability and equity account
balances

 Credit, the opposite of a debit, is an entry on the right side of the T-

account. It increases liability, expense, and owner's equity accounts and
decreases asset and prepaid expense accounts

 Accrued revenues are revenues that are earned in one accounting

period, but cash is not received until another accounting period

 Accrued expenses are expenses that have been incurred in one

accounting period but won't be paid until another accounting period

 Deferred income is, in accrual accounting, money received for goods or

services which have not yet been delivered. According to the revenue
recognition principle, it is recorded as a liability until delivery is made, at
which time it is converted into revenue

 Unearned revenue is money received from a customer for work that has
not yet been performed

 Prepaid expense is a type of asset on the balance sheet that results from
a business making advanced payments for goods or services to be
received in the future
John Carlo H. Sionelo 11/14/19

 Accounts payable is money owed by a business to its suppliers shown as

a liability on a company's balance sheet. It is distinct from notes payable
liabilities, which are debts created by formal legal instrument documents

 Notes payable is a liability in writing that promises to pay a specific

amount of money at future date or on demand. In other words, a note
payable is a loan between two entities