Republic of the Philippines

CEBU TECHNOLOGICAL UNIVERSITY

Main Campus
Corner M.J. Cuenco Avenue and R. Palma St., Cebu City
COLLEGE OF EDUCATION
Name: LoanneKaye S. Bayawa Date: October 02,2021
Year and Sec: BTVTED-ELX IV-4- Evening Instructor: Mrs. Rea Mea P. Pino
Program- 1stsem

Business Math

18. To find the current liability, one must look at the ____________.

A. Mortgage payable
B. Loans payable
C. Bonds payable
D. Salaries payable

 A mortgage loan payable is a liability account that contains the unpaid
principal balance for a mortgage. The amount of this liability to be paid within
the next 12 months is reported as a current liability on the balance sheet,
while the remaining balance is reported as a long-term liability.

 Business owners typically have a mortgage payable account if they have

business property loans.

 A loan is an arrangement under which the owner of property allows

another party the use of it (usually cash) in exchange for an interest
payment and the return of the property at the end of the lending
arrangement. The loan is documented in a promissory note. If any portion
of the loan is still payable as of the date of a company's balance sheet, the
remaining balance on the loan is called a loan payable.

 Bonds payable are a form of long term debt usually issued by corporations,
hospitals, and governments. The issuer of bonds makes a formal
promise/agreement to pay interest usually every six months (semiannually)
and to pay the principal or maturity amount at a specified date some years in
the future. The agreement containing the details of the bonds payable is
known as the bond indenture.

 Salaries payable is a type of entry in business accounting journals that describes

how much a company owes their employees. Accounting professionals or
managers record salaries payable when they owe salary pay to their employees,
 but haven't distributed the money yet. As employees accrue pay by working,
salaries payable increases based on how much money they earn. When they
receive paychecks, salaries payable decreases by that amount.

  Salaries payable refers only to the amount of salary pay that employers have not
yet distributed to employees. While salaries payable changes based on financial
transactions between a company and its employees, salaries expense is the same
regardless of the company's payments to employees

19. The resources that the firm acquires through creditors, is called _________.

A. Liability
B. Capital
C. Assets
D. Income

 In financial accounting, a liability is defined as the future sacrifices of

economic benefits that the entity is obliged to make to other entities as a
result of past transactions or other past events,the settlement of which may
result in the transfer or use of assets, provision of services or other yielding of
economic benefits in the future.

The accounting equation relates assets, liabilities, and owner's equity:

Assets = Liabilities + Owner's Equity

The accounting equation is the mathematical structure of the balance sheet.

 So, what does capital mean? Capital is anything that increases your ability to
generate value. You can use capital to increase value in your business’s
financial assets. Generally, business capital includes financial assets held by
your company that you can use to leverage growth and build financial
stability. 

Capital and cash are not one and the same. Capital can be stronger than cash
because you can use it to produce something and generate revenue and income
(e.g., investments). But because you can use capital to make money, it is
considered an asset in your books (i.e., something that adds value to your
business). 
 So, what are assets? Essentially, an asset is any resource with financial value
that is controlled by a company, country, or individual. There is a broad range
of assets that your business may own, create, or benefit from, including real
estate, cash, office equipment, goodwill, investments, patents, inventory, and
so on. Your balance sheet lists all of your company’s assets and explains how
they are financed, i.e., whether through debt, equity, or owned outright.

 Accounting income is profitability that has been compiled using the accrual
basis of accounting. In general, accounting income is the change in net
assets during a reporting period, excluding any receipts from or
disbursements to owners. It is also calculated as revenues minus all
expenses. Accounting income shows the results of all operational and
financial activities engaged in by a business.

It is also calculated as revenues minus all expenses. Accounting income shows the
results of all operational and financial activities engaged in by a business.