Account Titles (lamat jean tank yuo to my man <3)

ASSETS
● Cash – currency (bills and coins), checks, postal money orders, and treasury warrants
received by the business
● Accounts Receivable – amounts collectible from customers or clients (for goods
sold and services rendered).
In general, this account is not supported by promissory notes so it is often referred to as
arising from sales “on open account”.
- Note: When a business does not expect to collect all its receivables, bad
debts are provided and the accumulated amount thereof in “allowance for bad
debts” is treated as a deduction from receivables.
● Merchandise Inventory refers to goods acquired for sale and are still unsold
● Notes Receivable are amounts collectible that are covered by promissory notes
● Prepaid Expenses are expenses to be incurred yet in the future but are already paid. -
- Examples: Prepaid Rent, Prepaid Interest, and Prepaid Insurance.
● Unused Supplies – supplies that are still unused as of the end of an accounting
period
● Recurring Expenses – expenses of future accounting period(s) that are paid in
advance.
- Examples: Unexpired portion of insurance premiums (prepaid insurance) and
advertisements paid in advance (prepaid advertising)
● Land – land acquired by the business for its use
● Building – structures or edifices acquired for use of the business
● Machinery and Equipment – heavy, metallic, and movable items that are capable of
performing certain functions or used to perform certain functions.
- Examples are sewing machines, lathe machines, cutting machines, and tractors.
● Delivery Equipment – wheeled items used in making deliveries to customers or clients.
- Examples are vans and trucks.
● Furniture and Fixtures. referring to movable items of significant value acquired to
improve the workable condition of a place such as tables, chairs, cabinets, electric fans,
and air-conditioners.
 ● Office Equipment – heavy, metallic, and movable items used in an office to perform
certain functions or are capable of performing certain functions.
- Examples are typewriters, posting machines, and computers.
● Tools – handy, small, and usually metallic items used in performing certain functions
such as saws, hammers, pliers, scissors, screwdrivers and jacks.
- Tools in general have long useful life but do not have significant peso value.
- Note: The cost of assets with relatively permanent life (such as buildings,
machinery equipment, and furniture) is allocated based on useful (or economic)
life. The allocated portion to each accounting period is charged to Depreciation
Expenses. The reduction in the asset value is accumulated in the Accumulated
Depreciation account, a deduction from the corresponding asset account. In the
case of tools, a portion of their cost may be written off by charges to Tools
Expense.

EXPENSES
● Taxes and Licenses – cost of permits and taxes incurred
● Advertising Expenses – incurred in making the public aware of the goods and services
being offered by the business.
- Examples are the costs of or rentals for signboards and neon signs and
advertisements in the newspapers and through radio and television.
● Salaries and Wages – the compensation earned by employees for services rendered to
the business.
- Examples are the salaries of sales and office employees and the wages of
employees holding blue-collar jobs (factory and shop workers, maintenance men,
drivers, and mechanics).
● Supplies Expenses – the cost of supplies already used.
- Examples are factory and shop supplies (rags, brooms and lubricants), office
supplies (paper, pencils, adding machine tapes, and erasers) and dental supplies
(cotton, dental floss, and facial tissue paper).
● Light, Power, and Water – the cost of light, power and water consumption as indicated
on bills presented by utility companies (MERALCO and Manila Water Co., Inc.)
● Telephone and Telegram – telephone and telegraph charges as indicated on bills
presented by telecommunication companies (PLDT, PT & T, RCPE, etc.)
 ● Rent Expense – the amount of rentals incurred based on occupancy of space or usage
of property and equipment

● Tools Expense – cost of tools treated as an expense

● Depreciation Expense – the portion of property cost allocated to an accounting period.
- Example: A machine costing P20,000 has an estimated useful life of 5 years.
Annual depreciation expense may be P4,000 (or P20,000/5 years).
● Insurance Expense – insurance premiums related to the current period
● Bad Debts – provision for uncollectible receivables
● Miscellaneous Expenses – the different minor expenses incurred and for which no
specific account title has been adopted.
- Examples are transportation expenses for P2.00 and bank service charges for
P10.00.

OWNERS EQUITY
● Owner Capital – capital of the sole proprietor in his business. If the owner is Jose P.
Golez, the account becomes Jose P. Golez, Capital. At the end of the accounting period,
it is adjusted for withdrawals and net income (net loss).
● Owner Drawing – This account title is used for withdrawals made by the owner. If the
owner’s name is Jose P. Golez, the account title is Jose P. Golez, Drawing or Jose P.
Golez, Personal.

LIABILITIES
● Accounts Payable – obligations to suppliers for items bought and are not supported by
promissory notes. It is often referred to as arising from purchases “on an open account”.
● Notes Payable – obligations covered by promissory notes.
● Expenses Payable (Accrued Expenses) – obligations for expenses already incurred
but not yet paid.
- Examples are Taxes Payable, Salaries and Wages Payable, and Accrued
Advertising.
● Loans Payable – obligations arising from loans obtained.
REVENUE
● Service Income. This refers to revenue realized by providing services to customers
● Fees Income. This refers to revenue realized by providing professional services to
clients.
- Examples are legal, dental and medical fees.
● Sales. This account title is used to refer to revenue from the sale of goods

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