Questions and Answers
What is the term for the structure used to house an office, store, or factory?
Which of the following is NOT an example of equipment used in a business?
What does the term 'accumulated depreciation' refer to?
Which type of liability is expected to be liquidated within one year?
Signup and view all the answers
What type of liability is described as money owed supported by a promissory note?
Signup and view all the answers
What does the term 'leasehold or lease right' refer to?
Signup and view all the answers
What is an example of a current liability?
Signup and view all the answers
Which of the following is classified as furniture and fixtures?
Signup and view all the answers
What was the total book value of the assets listed for Jepsy’s science tutorials store?
Signup and view all the answers
What was the current market value of the merchandise inventory?
Signup and view all the answers
How much did Carl Angelo initially invest to buy the store?
Signup and view all the answers
What is the net assets value after accounting for liabilities?
Signup and view all the answers
What was the book value of the office furniture and equipment?
Signup and view all the answers
How much is the accounts payable listed in the transaction?
Signup and view all the answers
Which asset had the highest current market value?
Signup and view all the answers
What amount did Jepsy decrease from the value of merchandise inventory?
Signup and view all the answers
What is a credit memorandum?
Signup and view all the answers
In FOB Destination, Freight Collect, who is responsible for the transportation costs?
Signup and view all the answers
Who assumes title to goods in a FOB Shipping Point agreement?
Signup and view all the answers
What does Freight Prepaid indicate in shipping terms?
Signup and view all the answers
Which type of memorandum does a buyer issue to indicate a return?
Signup and view all the answers
In which scenario does the seller shoulder the transportation costs?
Signup and view all the answers
What is the responsibility of the buyer in FOB Shipping Point, Freight Collect?
Signup and view all the answers
What are doubtful accounts primarily concerned with?
Signup and view all the answers
Which freight term indicates the buyer receives title at the shipping point?
Signup and view all the answers
Which method recognizes bad debts only when it is certain?
Signup and view all the answers
What is the formula for calculating simple interest?
Signup and view all the answers
How is depreciation calculated?
Signup and view all the answers
What type of account adjustment is necessary if the periodic inventory system is in use?
Signup and view all the answers
Which financial statement is also known as the Profit or Loss Statement?
Signup and view all the answers
What does Freight Collect indicate in a transaction?
Signup and view all the answers
In which account is depreciation expense recorded?
Signup and view all the answers
Which account represents the cumulative amount of depreciation that has been expensed up to a specific date?
Signup and view all the answers
What is the main purpose of posting in accounting?
Signup and view all the answers
Which type of ledger shows both debits and credits alongside balances?
Signup and view all the answers
What facilitates the tracing of an entry to and from the journal and ledger?
Signup and view all the answers
What is a T-Account primarily used for in accounting?
Signup and view all the answers
What does the Chart of Accounts provide for a bookkeeper?
Signup and view all the answers
What is 'footing' in the context of ledger accounts?
Signup and view all the answers
In the context of ledger accounts, what does 'posting' help to achieve?
Signup and view all the answers
Study Notes
Business Assets
- Building: Structure for housing offices, stores, or factories.
- Equipment: Includes typewriters, air conditioners, calculators, computers, and vehicles (trucks, cars) for business operations.
- Furniture and Fixtures: Comprises tables, chairs, curtains, lighting fixtures, and wall decor.
- Leasehold Rights: Lessee obtains long-term usage rights of a property for a fee.
- Accumulated Depreciation: Contra asset account reflecting reduced value of property, plant, or equipment due to usage over time, deducted from total asset value.
Liabilities
-
Current Liabilities: Debts due to be settled within a year or in the operating cycle, typically paid using current assets.
- Accounts Payable: Liabilities to suppliers for goods/services received on credit.
- Notes Payable: Liabilities established via promissory notes to creditors.
- Loans Payable: Borrowings from banks or financial institutions.
Investment Scenario
- Jepsy offers Jepsy’s Science Tutorials Store to Carl Angelo for P208,000.
- Adjustments made due to decreased values in merchandise inventory and office furniture/equipment.
-
Asset Valuations:
- Accounts Receivable: P100,000
- Merchandise Inventory: P138,000 (declined from P240,000)
- Office Furniture & Equipment: P120,000 (declined from P250,000)
- Total Assets: P358,000 after liabilities.
Returns and Allowances
- Credit Memorandum: Issued by seller to inform buyer of adjustments to their account due to returns or price reductions.
- Debit Memorandum: Issued by buyer for reductions.
Freight Terms
- FOB Destination, Freight Prepaid: Seller bears freight cost.
- FOB Destination, Freight Collect: Seller bears freight cost; buyer picks up.
- FOB Shipping Point: Buyer assumes transportation costs from shipment point; title transfers at this point.
Ledger Management
- Ledger: Records all changes to account balances.
- General Ledger: Final record book for transactions.
- Posting: Transferring journal entries to the ledger.
- T-Account: Tool for analyzing the impact of transactions on accounts.
Chart of Accounts
- Records transactions affecting assets, liabilities, and owner's equity.
- Guides bookkeepers in transaction recording.
Doubtful Accounts
- Represents potentially uncollectible customer accounts.
- Allowance Method: Estimates bad debts based on historical data.
- Direct Write-off Method: Recognizes bad debts only when they are considered uncollectible.
Depreciation
- Systematic allocation of the cost of a non-current asset over its useful life.
- Depreciation Formula: [ \text{Depreciation} = \frac{(\text{Cost} - \text{Salvage Value})}{\text{Estimated Useful Life}} ]
Financial Statements
- Income Statement: Also known as Profit or Loss Statement; outlines revenues and expenses to show business performance.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on various types of office and store equipment. This quiz covers essential tools and furniture like typewriters, calculators, and office furniture. Dive in to see how well you understand the assets used in business environments!