Lesson 1

Question 1

It pertains to resources which
are controlled and owned by the
business.

Answer 1

Assets

Question 2

It is derived from deducting the total liabilities to the total assets of a company.

Answer 2

Equity

Question 3

pertains to the
obligations that the business owed to
other entities arising from past events
which are to be settled in the future?

Answer 3

Liabilities

Question 4

is classified as Current Asset?

Answer 4

Prepaid Expenses

Question 5

financial
statements presents the financial position
of an entity at a given or specific date?

Answer 5

Statement of Financial Position

Question 6

Accounting Equation

Answer 6

Asset= Liabilities + Owners Equity

Asset - Liabilities = Owners Equity

Question 7

Statement of Financial Position

Answer 7

Asset, Liabilities, and Equity

Question 8

SFP also called balance sheet. Its reports the permanent accounts as of the end of an accounting period.

Answer 8

Statement of Financial Position

Question 9

What the business owns

Answer 9

Assets

Question 10

What the business own and claims

Answer 10

Liabilities

Question 11

What the business is worth

Answer 11

Owners Equity

Question 12

are resources with future benefits that are within the control of the company.

Answer 12

Assets

Question 13

Resources are classified into asset accounts based on its future use to the company.

Answer 13

1.Cash
2.Receivables
3.Inventory
4.Prepaid Expenses
5.Property, Plant and Equipment
6.Intangible Assets

Question 14

The most well-known asset class first

Answer 14

Cash

Question 15

is a general term that refers to the company’s right to collect or claim payment.

Answer 15

Receivables

Question 16

is another kind of receivables. It is evidenced by promissory notes (PN).

Answer 16

Note Receivable

Question 17

account reports the cost of unsold merchandise.

Answer 17

Inventory

Question 18

is an important issue in inventory accounting. The owner places his goods “on- _______” in the premises of the store owner.

Answer 18

Consignment

Question 19

refer to future expenses that the company had paid for in advance.

Answer 19

Prepaid Expenses

Question 20

Another kind of prepaid expenses is

Answer 20

Insurance

Question 21

are long-term assets that are used in the operations of the company.

Answer 21

Property, Plant, and Equipment or PPE for short

Question 22

are long-term assets similar to PPE. These assets will be used in the business for more than one year. The allocation of the cost of _________ to the year it was used is called amortization.

Answer 22

Intangible Assets

Question 23

these are obligations that the company is required to pay.

Answer 23

Liabilities

Question 24

refers to the unpaid expenses of the company as of the cut-off date of the statement of financial position.

Answer 24

Accrued Expenses

Question 25

Customer deposits or down payments are customer payments received before the delivery of goods or services.

Answer 25

Unearned Income

Question 26

refer to obligations with due dates that fall more than one year from the date of the SFP.

Answer 26

Long-Term Liabilities

Question 27

Investment made by partners to the business is

Answer 27

Capital