NAME : Lintag, Aldrin James S.

SECTION: ABM 12-YA-Topics OCR

DIRECTION:

A. Answer the following question.

B You can put your answer your Microsoft word or clean sheet of paper.

C. Submit on before the dead deadline.

D. Rename your file

Topics: Review of Accounting 1:

A. Accounting Elements
1.) Enumerate and define the 5 Accounting Elements /Major Accountants.

 REVENUES
 ASSETS
 LIABILITIES
 EXPENSES
 EQUITY

2.) Give at least 5 example of each Accounting elements /Major Account.

 REVENUES
1. Sales, Service Revenues, Fees Earned, Interest Revenue, Interest Income. Revenue accounts are credited when services are
performed/billed and therefore will usually have credit balances.

2. Any overhead expense, such as salaries for the corporate office, which typically fall under selling, general, and administrative expenses
(SG&A)
3. Utilities and Rent.
4. Property taxes.
5. Salaries and employee wages

 ASSETS
1. Cash and cash equivalents, certificates of deposit, checking, and savings accounts, money market accounts, physical cash,
Treasury bills. Property or land and any structure that is permanently attached to it.
2. An asset can often generate cash flows in the future, such as a piece of machinery, a financial security, or a patent.
3. Personal assets may include a house, car, investments, artwork, or home goods.
4. Any resource with financial value that is controlled by a company, country, or individual
5. Cash and cash equivalents

 LIABILITIES

1. Accounts payable. Invoiced liabilities payable to suppliers.

2. Accrued liabilities. Liabilities that have not yet been invoiced by a supplier, but which are owed as of the balance sheet date.

3. Use taxes payable. Use taxes are essentially sales taxes that are remitted directly to the government having jurisdiction, rather

than through a supplier who would otherwise remit the tax.

4. Warranty liability. A reserve for any warranty liability associated with sales, for which warranty claims have not yet been received.

5. Current portion of debt payable. Any portion of long-term debt that is due for payment within one year.

 EXPENSES
1. Cost of goods sold.
 2. Sales commissions expense.
3. Delivery expense.
4. Rent expense.
5. Salaries expense.

 EQUITY
1. If you own a car worth $25,000, but you owe $10,000 on that vehicle, the car represents $15,000 equity. It is the value or interest of the
most junior class of investors in assets.
2. Stockholders’ equity is common for businesses structured as corporations. To see how much money is available for a
shareholder distribution, look at shareholders’ equity.
3. Owner’s equity refers to the amount of ownership you have in your business. You can calculate owner’s equity by subtracting your liabilities
from your assets. Owner’s equity shows you how much available capital your small business has.
4. Common stock, additional paid-in capital, preferred stock, retained earnings and the accumulated other comprehensive income.
5. The amount of capital invested or owned by the owner of a company.

B. Rules of Debt and Credits

1.) What is Double Entry System?

Answer: Double entry system is method of arranging account in such away that the dual aspect would be express by a debit
amount and an equal and off setting credits amount.

2.) What are the rules of Debit and Credits? Determine the normal balance of each accounting element

Answer:

 In case of personal account

-Debit the receiver and credits the giver.

 In case of nominal account

-Debit all expenses and loses credits all income and liabilities.

 In case of real account

-Debit what comes and credits what goes out.