Ma. Aizey G.

Torres
BSA 1C

1. What is the basic accounting equation?

- Assets = Liabilities + Capital
2. What are the 5 major accounts? Define each and enumerate examples.
- Here are the 5 major accounts; assets, liabilities, equity, revenue, and expenses.
Assets are resources owned by the business. Examples are land, building, cash,
and accounts receivable. Liabilities, on the other hand, are obligations by the
business. Examples are accounts payable and notes payable. Equity refers to a
company's book value, which is the difference between liabilities and assets on
the balance sheet.For example, if you own a car worth $25,000, but you owe
$10,000 on that vehicle, the car represents $15,000 equity. Revenue is income,
especially when of a company or organization and of a substantial nature.
Examples are the sale of goods, products and services. Lastly, expense in
accounting is the money spent, or costs incurred, by a business in their effort to
generate revenues. Essentially, accounts expenses represent the cost of doing
business; they are the sum of all the activities that hopefully generate a profit.
Examples of expenses include rent, utilities, wages, salaries, maintenance,
depreciation, insurance, and the cost of goods sold.
3. What is a chart of accounts? Submit a table and also have a copy prepared for the next
meeting.
- A chart of accounts is a list of financial accounts set up, usually by an
accountant, for an organization, and available for use by the bookkeeper for
recording transactions in the organization's general ledger.
4. What is the accounting cycle? Prepare a diagram and have a copy for the next meeting.
- The accounting cycle is the process of accepting, recording, sorting, and
crediting payments made and received within a business during a particular
accounting period.