Wages expense is an expense account, whereas wages payable is a current liability account.. Beginning inventory is the recorded cost of inventory in a company's accounting records at t
Trang 11) What is the difference Wages payable and Wages expense ?( sự khác nhau giữa tiền lương phải trả và chi phí tiền lương)
Wages expense is an expense account, whereas wages payable is a current liability account A current liability is one that the company must pay within one year The company presents its expense accounts on the income statement and its liability accounts on the balance sheet
2) Explain the matching principle.( Giải thích nguyên tắc phù hợp)
When revenue is recognized, there must be one corresponding expenses related to the generation of that revenue Costs corresponding with sales includes the cost of any revenue generated and costs of previous periods or cost-related pay but revenue in that period
3) Define beginning inventory and ending inventory
Beginning inventory is the recorded cost of inventory in a company's
accounting records at the start of an accounting period The beginning inventory is the recorded cost of inventory at the end of the immediately preceding accounting period, which then carries forward into the start
of the next accounting period
Beginning inventory + Purchases during the period - Ending inventory = Cost
of goods sold
Ending inventory is the value of goods available for sale at the end of
the accounting period The ending inventory is recorded as the lower
of the cost of the inventory or the market value of the inventory Assuming no write-downs, the ending inventory can be found by starting with the beginning inventory, adding purchases and subtracting the cost of goods sold
4) What is a T-account ? what is its purpose?
A T-account is a visual aid used to depict an account in a general
ledger Above the top portion of the T would be the account title On the left-side of the base of the T would be any debit amounts; on the right-side would be the credit amounts
The T-account can be helpful in determining the proper balance for an
account or to determine the amount to be entered in order to arrive at
a desired balance
5) Define the following:
a) Asset
Trang 2An asset is a resource with economic value that an individual, corporation
or country owns or controls with the expectation that it will provide future benefit
b) Current asset
Current assets are balance sheet accounts that represent the value of all assets that can reasonably expect to be converted into cash within one year Current assets include cash and cash equivalents, accounts receivable, inventory, marketable securities, prepaid expenses and other liquid assets that can be readily converted to cash
c) Liability
A liability is a company's financial debt or obligations that arise during the course of its business operations Liabilities are settled over time through the transfer of economic benefits including money, goods or services Recorded on the right side of the balance sheet, liabilities include loans, accounts payable, mortgages, deferred revenues and accrued expenses
d) Current liability
Current liabilities are a company's debts or obligations that are due within one year, appearing on the company's balance sheet and include short term debt, accounts payable, accrued liabilities and other debts
e) Owner’s capital
An owners capital account is the equity account listed in the balance sheet
of a business It represents the net ownership interests of investors in a business This account contains the following information:
The investment of the owners in the business
The net income earned by the business
Reduced by any draws paid out to the owners
6) Define transaction and give an example of each of the two types of events that are considered transactions
A transaction is a business event that has a monetary impact on an entity's financial statements, and is recorded as an entry in its accounting records Examples of transactions are as follows:
Ex1: The Company borrowed $8,000 from a bank
Ex2: the Company sold Product A for $650 cash
Trang 3
7) What is the distinction between sales allowances and sales discounts?
Sales discounts is given if the customer / client pays within a specified
time Example: if you pay your bill in the first 15 days you will receive
a 1% discount, the full amount must be paid within 30 days
A sales allowance is a reduction in the price charged by a seller, due
to a problem with the sold product or service, such as a quality problem, a short shipment, or an incorrect price The sales allowance
is recorded as a deduction from gross sales, and so is incorporated into the net sales figure in the income statement
8) What is the distinction between purchase allowances and purchase discounts?
A purchase allowance is a reduction in the buyer's cost of merchandise
that it had purchased The purchase allowance is granted by the supplier because of a problem such as shipping the wrong items, the incorrect quantity, flaws in the goods, etc In the case of a purchase allowance, the buyer does not return the merchandise to the supplier
A purchase discount is a deduction that may be available to a buyer if
the buyer pays an invoice within a prescribed time For example, a supplier's invoice for $10,000 with the credit terms 2/10 net 30 indicates that the buyer will be allowed a purchase discount of $200 (2% of $10,000) if the buyer pays within 10 days If the buyer pays in
30 days, there is no purchase discount