Definition
Obligations or debts the business owes to other parties
Liabilities
when supplies are purchased with cash, what will happen to the cash account?
the cash account will decrease
What is the Accounting Equation
Asset = Liabilities + Owner's Equity
Asset = Php 120,000.00
Owner's Equity = Php 88,000.00
Liability = ???
Php 32,000.00
Costs incurred in the process of earning income
Expenses
What happens to the two accounts when you buy office equipment with cash?
cash account decreases, office equipment increasses
Formula for Current Ratio
Current Ratio = Current Asset ÷ Current Liabilities
Revenue = Php 247,000.00
Expenses = Php 172,000.00
Net Income (Loss) = ???
Php 75,000.00
Listing of all accounts and their account numbers in the ledger
Chart of accounts
What is the debit and credit when you receive cash from sales
Debit Cash
Credit Sales
Formula for Return on Equity
ROE = Net Income Available to Common Shareholders ÷ Ave. Total Equity
Current Asset = Php 55,000.00
Current Liability = Php 67,000.00
Current Ratio = ???
0.8209
Systematic process of identifying, recording, classifying, summarizing, and communicating financial information about an organization or individual
Accounting
what happens to the cash account when you sell a product and receive cash from your customer?
the cash account increases
Decision Rule for Net Present Value Formula
If NPV = 0
Indifferent
Cost of Goods Sold = Php 168,000.00
Average Inventory = Php 50,000.00
Inventory Turnover
3.36
Resources owned or controlled by a business that provide future economic benefits
Assets
Payment made to employees is called as
wages and/or salary
What is the Expanded Accounting Equation
Asset = Liabilities + Owner's Equity/ Capital + Revenue - Expenses
May bonus pa ba ang lahat?
BONUS! :)