ABM (BASIC ACCOUNTING)

MAJOR ACCOUNTS

MAJOR ACCOUNTS

The major accounts in accounting are assets, liabilities, owner's equity, revenues and expenses. Through revenues and expenses are under owner's equity account, they are shown separately because they are the main income statement accounts.

ASSETS property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies. 

  (under ng assets yung nasa baba)  

CASH this includes cash on hand (bills, coins, checks, money orders or bank draft), cash deposited in bank (savings, accounts or checking accounts) and cash fund (petty cash fund, or payroll fund) which are unrestricted in use.

ACCOUNTS RECEIVABLE this refers to open accounts which represent the amount of money owed by the customers to the business.

NOTES RECEIVABLE this represents the amount of money owed by the customer or debtor to the business evidenced by a promissory note.

INVENTORIES this represent assets held for sale in the ordinary course of business, in the process of production, for sale or in the form of materials or supplies to be consumed in the production process or in the rendering of services.

UNUSED SUPPLIES this represents supplies which remained unused at the end of the accounting period.

PREPAID RENT this refers to an evidence payment made by the business to cover for future rental payments.

EQUIPMENT this represents manual or automated machines used in the business.

FURNITURE AND FIXTURES this represents assets such as tables, chairs, filing cabinets, etc.

BUILDING this refers to physical structure owned and used by the business to conduct its business operations.

LAND this refers to the physical site owned by the business where the building is situated. It is not subject or depreciation.

ALLOWANCE FOR DOUBTFUL ACCOUNTS this is a contra valuation account which refers to the portion of account receivable that is estimated to be uncollectible at the end of a particular accounting period.

ACCUMULATED DEPRECIATION this is a contra valuation account which refers to the aggregate portion of the total cost of property plant and equipment that has been charged depreciation expense.

LIABILITIES are present obligations of the entity arising from past transaction or events.

(under ng liabilities yung nasa baba)

ACCOUNTS PAYABLE this refers to open accounts which present the amount of money owed by the business to the creditors or suppliers.

NOTES PAYABLE this represents the amount of money owed by the business to the supplier's or creditors evidenced by a promissory note

LOAN PAYABLE amount of money borrowed by the business from a bank or a lending institution.

MORTGAGE PAYABLE amount of money borrowed by the business from a bank or a lending institution which is secured by collateral.

ADVANCES FROM CUSTOMERS cash collected by the business in advance for service or good that is yet to be rendered or delivered.

OWNER'S EQUITY contains the net difference between total assets and total liabilities. It represents ownership.

(yung owner's equity nahahati sa dalawa. Yun yung revenue at expenses)

REVENUE is the earning arising from the main line of operations of the business.

(under ng revenue)

SERVICE REVENUE this refers to the earnings made by any business that is into rendering services.

INTEREST INCOME this represents interest credited by the bank to the account of the business arising bank deposits.

SALES the earning made by any business that is into selling goods or merchandise.

PROFESSIONAL FEES the earnings made by professionals or experts from rendering services to their clients.

EXPENSES are the cost being occurred by the business in generating revenues.

UTILITIES EXPENSE refers to the cost associated with the usage of electricity, water, and communication for a particular accounting period.

SALARIES EXPENSE refers to costs incurred associated with the services rendered normally by permanent and full-time employees who are paid on a regular basis usually monthly.

WAGES EXPENSE refers to costs incurred associated with the services renders normally by contractual or temporary employees and workers who are paid on an hourly rate or based on output.

TAXES AND LICENSES cost incurred to register the business acquire the right to operate and to settle taxes.

COST OF SALES refers to the costs of merchandise or goods that were said during a particular accounting period.

SUPPLIES EXPENSE represents to the amount of supplies that was used during a particular accounting period.

DOUBTFUL ACCOUNTS EXPENSE the amount of accounts receivable that is estimated as uncollectible and is recognized as am expense in the current accounting period.

DEPRECIATION EXPENSE represents to the allocated portion of the cost of property plant and equipment charged to expense in the current accounting period.