. Furniture factory is an example of this business activity.
- Manufacturing
ABC Company bought assets three years ago. This year, the company decided to write up the cost of these assets since their fair market value has increased. What concept or principle was violated?
This is used as a basis in accounting for the assets of a business because it can be measured objectively
Historical Cost
The start of A company’s accounting period is October 1 and ends September 30 of the following year. What kind of period is followed by A Company.
- Fiscal Year
Z Co. bought a pencil sharpener at a cost of P100.00. It is estimated to have a useful life of 10 years. Because of the length of its useful life, the accountant recorded this as a debit to office equipment. The accounting principle violated is.
- Materiality
A company that is engaged in the processing of raw materials to finished goods intended for sale.
- Manufacturing Company
This does not consider liquidation in accounting for the affairs of the business.
- Going Concern
The concept that requires the distinction between the personal assets and liabilities of a
proprietor from his business assets and liabilities.
- Entity
- This is the phase of accounting that makes accounting the language of business.
- Interpreting
- This is the exchange price considered in the accounting books upon recognition of the business transaction.
- Cost
Sorting similar and related business transactions into the three categories of assets, liabilities, and owner’s equity.
- Classifying
Note bearing 10% interest already earned but still uncollected. The interest is recorded as:
- Interest Receivable
The Final figure in the income statement when expenses exceed revenues.
- Net Loss
Good will Bookstore received a 10% commission from C & E Publishing House although it has not yet sold the books. The commission received will be recorded as _
- Unearned Commission
- The amount of assets consumed or services used in the process of earning a revenue:
- Expenses
When an owner issued a personal checking account in payment of the business liability, this is recorded as _
- Owner’s Capital
Expenses related to the use of electricity, fuel, water, and telecommunications facilities
- Utilities Expense
. A report showing the business worth as of a given period in terms of the business resources,
debts as well as the investments and withdrawals of the owner
1
- Balance Sheet
- Six-month rent received but not yet earned is recorded as
- Unearned Rent
The difference between Accounts Receivable and Allowance for Bad Debt
- Not Realizable Value
- Which of the following has a positive effect on owner’s equity?
- Revenue
- A company that purchases a finish product for future sale
- Merchandising Company
- The accountant should apply the same accounting methods to like items from one period to another
- Consistency
- This concept or principle will not apply if a business has declared bankruptcy or insolvency
Going Concern
This is the period of time, usually a span of one year, over which changes in the owner’s equity are summarized
Periodicity
