Account titles

• Allowance for Bad Debts


  The aggregate amount of estimated losses from uncollectible accounts receivable. Also known as "allowance for doubtful accounts"
• Intangible Assets

  Nonmonetary assets without physical substance held for use in the production or supply of goods and services
• Inventories

  • Raw materials inventories - materials or supplies to be consumed in the production process or in the rendering of services
  • Work-in-progress inventories - in the process of production for sale
  • Finished goods inventories - held for sale in the ordinary course of business
• Accumulated Depreciation


  The total amount of depreciation expenses recognized since the asset was acquired and made available for use
• Notes Receivable


  A written pledge that a customer will pay the business a fixed amount of money on a certain date
• Prepaid Expenses


  Expenses paid for by the business in advance to avoid paying cash in the future for a specific expense
• Short-Term Investments


  Readily marketable investments representing temporary investments of funds available for current operations to meet working capital requirements
• Accounts Receivable


  Claims against customers arising from the sale of services or goods on credit. Receivables supported by oral or informal promises to pay
• Accounts Payable represents the reverse relationship of accounts receivable. By accepting goods or services, the buyer agrees
• Intangible Assets


  • Copyrights
  • Franchises
  • Patents
  • Brand Names
• Cash


  Includes money that a bank will accept for deposit or face value. It includes coins, bills, currency, checks, and bank deposits
• Assets


  • Resources or things of value owned by a company as a result of company transactions
  • Prepaid expenses that have not yet been used up or have not yet expired
  • Costs that have a future value that can be measured
• Liabilities


  • Present obligations that have resulted from past events and can require giving up resources when settling them
• Land

  A lot on which the building of the business has been constructed or a vacant lot to be used as a future plant site. Land is not depreciable
• Building


  The structure owned by a business for its operation
• Assets


  Resources that help generate profit or revenues and maintain the operations of a business. Economic resources controlled that have resulted from past events and can provide future economic benefits
• Fixed or Non-Current Assets

  • Land
  • Building
  • Equipment
  • Accumulated Depreciation
  • Intangible Assets
• Copyright


  The exclusive right to copy and distribute a creative work
• Franchise


  A type of license that grants a franchisee access to a franchisor's proprietary business knowledge, processes, and trademarks, allowing the franchisee to sell a product or service under the franchisor's business name
• Brand Names


  Identifies a specific company, product, or service and differentiates it from similar brands within its category
• Equipment


  Consists of various assets such as machineries, factory equipment, transportation equipment, office equipment, computer equipment, furniture, and fixtures
• Fixed or Non-Current Assets

  Assets that cannot be easily and readily converted into cash and cash equivalents
• Patent


  Exclusive rights granted for an invention or product
• Current Assets

  Assets that can be easily converted into cash and cash equivalents typically within a year
• Owner's Equity


  Asset minus liabilities
• Current Liabilities

  • Accounts Payable
  • Notes Payable
  • Accrued Liabilities
  • Interest Payable
  • Salaries Payable
  • Utilities Payable
  • Unearned Revenues
• Liabilities


  Present obligations that have resulted from past events and can require you to give up resources when settling them
• Owner's Capital


  Record the original and additional investments of the owner of the business entity
• Income


  Increases in economic benefits during the period in the form of increases in assets, or decreases in liabilities that result in increases in equity
• Current Liabilities - Examples

  • Interest Payable - Interest incurred but not yet paid
  • Salaries Payable - Salaries already earned by employees but not yet paid
  • Utilities Payable - Utilities already used but not yet paid
• Owner's Equity - Components


  • Owner's Capital
  • Owner's Drawings or Withdrawals
• Owner's Drawings or Withdrawals

  Record the temporary withdrawals of the owner during the period
• Non-Current Liabilities

  • Mortgage Payable
  • Bonds Payable
• Brands that differentiate their service from similar brands within its category

  • Apple
  • Nike
  • Coca cola
  • Advil
• Types of Income


  • Service Income/Service Fees
  • Sales
  • Interest Income
  • Gains
• Gains

  • income earned from the sale of assets
• Cost of Sales or Cost of Goods Sold


  Represents the value of inventories that have been sold during the accounting period
• Expenses

  • COST OF SALES or COST OF GOODS SOLD
  • FREIGHT-OUT
  • SALARIES EXPENSE
  • RENT EXPENSE
  • UTILITIES EXPENSE
  • SUPPLIES EXPENSE
  • BAD DEBT EXPENSE
  • DEPRECIATION EXPENSE
  • ADVERTISING EXPENSE
  • INSURANCE EXPENSE
  • TAXES AND LICENSES
  • TRANSPORTATION AND TRAVEL EXPENSE
  • INTEREST EXPENSE
  • MISCELLANEOUS EXPENSE
  • LOSSES
• Freight-Out


  Represents the seller's costs of delivering goods to customers
• Utilities Expense

  Represents the costs of utilities (electricity, water, telephone, internet, cable TV, etc) that have been used during the accounting period