ABM 1

Also called balance sheet, which shows the assets, liabilities, and owner’s equity of a business at a specified date.

• Statement of Income

• Statement of Financial Position

• Statement of Cash Flows

• Statement of Profit or Loss

Its objective is to provide information about financial position, result of operation, and cash flows of enterprises and of individuals.

• Statement of Financial Position

• Statement of Income

• Books of Accounts

• Financial Statement

 The Basic Accounting Equation?

• Assets+Owner's Equity = Liabilities

• Current Assets = Current Liabilities + Capital

• Assets=Liabilities

  +Owner's Equity

• Assets=Liabilities -Owner's Equity

An income that is already collected but not yet earned?

• Accrued Income

• Pre-collected Income

• Accrued Expense

• Accounts Receivable

Journal entries which are to be recorded in the General Journal and are usually prepared at the end of an accounting period of one year following the preparation of a Trial Balance?

• General Journal Entries

• Year-end adjustments

• Accounting entries

• Adjusting Entries

Withdrawal of cash by the owner may result to-

• owner's capital debit

• cash account debit

• owner's drawing debit

• owner's capital credit

When services are rendered for cash-

• cash will increase

• cash will decrease

• no effect in cash

• service income will decrease

A collection from customer's account may result to a-

• credit accounts receivable

• debit accounts receivable

• credit, cash

• none of these

A transaction caused a P500,000 decrease in both total assets and total liabilities. This transaction could have been:

• Purchase of a delivery truck for P500,000 cash

• An asset with a cost of P500,000 was destroyed by fire

• Payment of a P500,000 bank loan

• Collection with a P500,000 accounts receivable

A company buys a P30,000 equipment on credit. This transaction will affect the-

• Income Statement only

• Balance Sheet only

• Both income statement and balance sheet

• no effect on both statement