ACCOUNTING

BASIC ELEMENTS OF ACCOUNTING

Let's start with Pre-test:>

1. This element of accounting is owned and controlled by the firm
A. Current Asset
B. Liability
C. Asset
D. Equity

2. What do you call the money in hand or in banks?
A. Coins
B. Cash
C. Money
D. Receivables

3. This are the assets held for resale
A. Sales
B. Equipment
C. Inventory
D. Building

4. What are the amounts due from customers arising from credit sales or credit services?
A. Expenses
B. Receivables
C. Revenue
D. Capital

5. This are the obligations of the firm from another company?
A. Depreciation
B. Non current Liability
C. Liability
D. Insurance

6. The following are examples of current assets, EXCEPT:
A. Building
B. Cash
C. Inventory
D. Prepaid expense

7. Assets minus liabilities equals_____
A. Not in the other choices
B. A figure less than zero, because liabilities are higher than assets.
C. Zero, since both sides of the accounting equation should be equal.
D. Owners' claim to company assets

8. This are the obligations of the firm from another entity;
A. Depreciation
B. Non current Liability
C. Liability
D. Insurance

#DISCUSSION:>
There are 3 basic elements of accounting, namely:
- asset
- liability
- owner's equity

Familiar kana ba sa mga yan?

Take note:
1. ASSET
Are the resources owned and controlled by the firm

Pag mamay ari ng business mo

Next...
2. LIABILITY
Are debts and obligations of the company to another entity

Ito yung utang sa ibang tao or sa banko

Next...
3. OWNERS EQUITY/ EQUITY
Owners claim in the business

"Utang" "ng business" sa may-ari (owner)

Tinawag po nating "Utang" or "Obligation" ang Owner's Equity dahil ang point of view natin ay si "Business"

Dahil na kay BUSINESS ang mga ininvest/contributions/puhunan ni Owner, parang may "Utang" si BUSINESS dahil may "obligation" siyang ibalik ang mga yan sa may-ari/owner.

Again, our POINT of VIEW is the "Business" (not the owner po)

Take note:
Magkaiba/hiwalay ang "Business" at "Owner"
Bakit?
Dahil ang Business ay "Artificial being" lang o POINT OF VIEW lang natin

Ang Owner naman po ay "Human being"
~Syempre tao

Kapag pinag minus mo ang asset at liability ito ang lalabas (A-L= OE)

Continuation:>
Types Under the equity may tinatawag tayong
- Capital
- Withdrawal/ Drawings
- Income
- Expenses

• CAPITAL
Is the value of cash and other assets invested in the business by the owner of the business

Halimbawa:
Nagpasok ka ng pera sa business, yung amount na pinasok mo sa business ay siya ring amount ng capital mo.

Parang puhunan:>

Gets????

Next..
• WITHDRAWAL/ DRAWINGS
An action of withdrawing something.