ACLC

PRACTICAL
EXAM
IN

FABM
CHARTS OF ACCOUNT

ADRIAN CEPE PAM GEYSER TAYCO

ACCOUNT
ASSETS

CASH
-Cash is also known as money, in physical form. Cash, in a corporate setting, usually includes
bank accounts and marketable securities, such as government bonds and banker's
acceptances.
ACCOUNT RECEIVABLE
-(AR) are the balance of money due to a firm for goods or services delivered or used but not
yet paid for by customers. Accounts receivable are listed on the balance sheet as a current
asset. Any amount of money owed by customers for purchases made on credit

ALLOWANCE FOR BAD DEBTS

-An allowance for bad debt is a valuation account used to estimate the amount of a
firm's receivables that may ultimately be uncollectible. It is also known as an allowance for
doubtful accounts.

INVENTORY
-An allowance for bad debt is a valuation account used to estimate the amount of a
firm's receivables that may ultimately be uncollectible. It is also known as an allowance for
doubtful accounts.

PREPAID EXPENSES
-A prepaid expense is an expense that has been paid for in advance but not yet incurred. In
business, a prepaid expense is recorded as an asset on the balance sheet that results from a
business making advanced payments for goods or services to be received in the future.

SUPPLIES
-a stock of a resource from which a person or place can be provided with the necessary
amount of that resource:

OFFICE EQUIPMENT
-Office equipment consists of stationery as well as the machines present in the office.
Stationery are the products that used daily by the employees like staplers, gum, notebook,
pins, pen, clip, ETC

ACCUM DEPRN - OFF EQPT

-Accumulated depreciation is the cumulative depreciation of an asset up to a single point in
its life. Accumulated depreciation is a contra asset account, meaning its natural balance is a
credit that reduces the overall asset value.

STORE EQUIPMENT
-Store Equipment means all convenience store fixtures, machinery, furniture, equipment

ACCUM DEPRN - STORE EQPT

equipment is the aggregate amount of depreciation that has been charged against the
equipment asset. The account has a natural credit balance.

TRANSPORTATION EQUIPMENT
-is mechanical equipment used for the movement, storage, control, and protection of
materials, goods and products throughout the process of manufacturing, distribution,
consumption, and disposal.

ACCUM DEPRN - TRANS EQPT

Transportation is the aggregate amount of depreciation that has been charged against the
equipment asset. The account has a natural credit balance. The balance in this account is
paired with the equipment fixed asset account to arrive at the net book value of all
equipment

BUILDING
-Buildings is the account in which the value of buildings owned by the company is recorded. Its
balance is debit and represents the cost of acquisition, construction, expansion, installations
and adaptations of the buildings by the company

ACCUM DEPRN - BUILDING

-Accumulated depreciation is the cumulative depreciation of an asset up to a single point in
its life. Accumulated depreciation is a contra asset account, meaning its natural balance is a
credit that reduces the overall asset value.

LAND
-Land is classified as a long-term asset on a business’s balance sheet, because it typically isn’t
expected to be converted to cash within the span of a year. Land is considered to be the asset
with the longest life span

INTANGIBLE ASSETS
-An intangible asset is an asset that lacks physical substance. Examples
are patents, copyright, franchises, goodwill, trademarks, and trade names, as well as software.
This is in contrast to physical assets (machinery, buildings, etc.
LIABILITY
ACCOUNTS

ACCOUNTS PAYABLE
-Accounts payable is money owed by a business to its suppliers shown as a liability on a
company's balance sheet. It is distinct from notes payable liabilities, which are debts created
by formal legal instrument documents

NOTES PAYABLE
-A note payable is a written promissory note. Under this agreement, a borrower obtains a
specific amount of money from a lender and promises to pay it back with interest over a
predetermined time period.
ACCRUED EXPENSES
-An accrued expense, also known as an accrued liability, is an accounting term that refers to
an expense that is recognized on the books before it has been paid.

SALARIES PAYABLE
-Salary payable is the amount of liability or payment of the company towards its employees
against the services provided by them but not yet paid at the end of the month, year, or for a
specific period.

UTILITIES PAYABLE
-A current liability account that reports the amounts owed to the utility companies for
electricity, gas, water, phone as of the date of the balance sheet. If a utility bill has not been
received, the company will have to estimate the amount owed for the service it has used up to
the balance sheet date.

INCOME TAXES PAYABLE

-Income tax expense is a component that features on the income statement under the heading
of ‘other expenses.’ After the taxable income is determined, the business or individual is liable
to pay income tax on that income. Through income tax returns that are filed by businesses and
individuals alike, the tax liabilities are determined.
 EQUITY
ACCOUNTS

OWNERS CAPITAL
-Owner’s Capital, also called owner’s equity, is the equity account that shows the owners’ stake
in the business. In other words, this account shows the how much of the company assets are
owned by the owners instead of creditors

OWNERS WITHDRAWAL
-Withdrawals by owner are transfers of cash from a business to its owner. These cash transfers
reduce the amount of equity left in a business, but have no impact on the profitability of the
entity.

SERVICE REVENUE
-Service revenue is the income that a business generates in return for completing a service. It
includes any service that the business provides, whether or not the customer submits payment.
SALES
-Sales refers to the volume of goods and services sold by a business during a reporting period.
When quantified into a monetary amount, it is positioned at the top of the income statement,
after which operating and other expenses are subtracted to arrive at a profit or loss figure

SALES RETURN AND ALLOWANCE

-Sales Returns and Allowances is a contra-revenue account deducted from Sales. It is a sales
adjustments account that represents merchandise returns from customers, and deductions to
the original selling price when the customer accepts defective products.

SALES DISOUNTS
-Sales Discount" is a contra-revenue account; presented as a deduction from "Sales" in the
income statement to come up with the "Net Sales". The computation can also be presented in
the notes to financial statements

INTEREST INCOME
Interest income refers to revenue earned for lending money. It is computed by multiplying the
principal amount by the interest rate for the period the money was lent. Interest Income is an
income account and is presented in the income statement.

COST OF SALE
-The cost of sales, also known as the cost of goods sold (COGS), represents the direct costs
related to the manufacturing or purchasing of a good that is sold to a customer. Companies use
this measurement to calculate their gross margin.

PURCHASES
-Purchasing is the process a business or organization uses to acquire goods or services to
accomplish its goals. Although there are several organizations that attempt to set standards in
the purchasing process, processes can vary greatly between organizations.

PURCHASE RETURN AND ALLOWANCE

-purchases returns and allowances definition The temporary contra purchases account used in a
periodic inventory system which represents the amounts of merchandise that were returned to
suppliers and the amounts allowed as deductions by suppliers for goods not returne

PURCHASE DISCOUNTS
-A cash discount is an incentive that a seller offers to a buyer in return for paying a bill owed
before the scheduled due date. The seller will usually reduce the amount that the buyer owes by
a small percentage or a set dollar amount. If used properly, cash discounts improve the days-
sales-outstanding aspect of a business's cash conversion cycle.

FRIEGHT IN
-Freight in is the transportation cost associated with the delivery of goods from a supplier to the
receiving entity. For accounting purposes, the recipient adds this cost to the cost of the received
goods.
EXPENSE
ACCOUNT

SALARIES EXPENSE
-Under the accrual method of accounting, the account Salaries Expense reports the salaries
that employees have earned during the period indicated in the heading of the income
statement, whether or not the company has yet paid the employees. 

SUPPLIES EXPENSE
-Supplies expense in accounting refers to the cost of a collection of goods that the company
used during a specific reporting period to operate. Staff members may use these items
regularly to complete their daily tasks.

UTILITIES EXPENSE
-Utilities Expenses in accounting are the cost that the company incurs during a period to avail
of the services provided by the public utility companies in the place of operation of the
company like the telephone facility, electricity, gas, water, sewer, etc.

COMMUNICATION EXPENSE
-Communication expense is a temporary account and it is recorded in Income Statement for
the period and closed to Income Summary Account at the end of the accounting. A company
may pay communication expense for cash or through check / cheque.

TRAVEL EXPENSE
-Travel expenses are costs associated with traveling for the purpose of conducting business-
related activities. Reasonable travel expenses can generally be deducted by the business when
employees incur costs while traveling away from home specifically for business purposes.

RENTAL EXPENSE
-Rent expense refers to the total cost of using rental property for each reporting period. It is
typically among the largest expenses that companies report. Only two expenses are usually
larger than rental expense: cost of goods sold

FUEL EXPENSE
-Fuel Expenses means all fixed or variable costs, expenses, losses, liabilities, claims and charges
related to the acquisition, storage, inventory, handling, balancing and transportation and
delivery of fuel for each of the Facilities, including reagents, emissions allowances and related
costs of credit at a weighted average cost; provided, however, that the term “Fuel Expenses”
excludes the costs of any fuel that is capitalized under applicable accounting rules and
guidance; and provided further, however, that all costs and expenses shall be calculated on a
consumed basis.

ADVERTISING EXPENSE
-advertising expense definition. Advertising Expense is the income statement account which
reports the dollar amount of ads run during the period shown in the income statement.
Advertising Expense will be reported under selling expenses on the income statement.

DELIVERY EXPENSE
-Delivery expense is a general ledger account, in which is stored all freight out expenses
incurred by a business. Expenses that may be stored within this account include the costs of
fuel and fees paid to third-party transport services.

COMMISSION EXPENSE
-The commissions expense is an account on an income statement generated with the accrual
method of accounting. It shows how much was slated to be paid in commissions during the
same period that the related revenue was earned. This kind of expense is accounted for in the
same period as commission liability as well.

DEPRECIATION EXPENSE
-Depreciation expenses are the expenses charged to fixed assets based on the portion of assets
consumed during the accounting period based on the company’s fixed asset policy.

TAXES AND LICENSES

-Tax accounting is a structure of accounting methods focused on taxes rather than the
appearance of public financial statements. Tax accounting is governed by the Internal
Revenue Code, which dictates the specific rules that companies and individuals must follow
when preparing their tax returns.

INTEREST EXPENSE
-Interest expense is the cost of borrowed funds. It is reported on the income statement as a
non-operating expense, and is derived from such lending arrangements as lines of credit,
loans, and bonds. Interest expense is usually a tax-deductible expense, which makes debt a
lower-cost form of funding than equity.