Details Title: Accounting 1.5 Description: balance day adj, income and balance sheets etc Total Flash Cards: 13 Created: 08/03/2007 00:55:11		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Accounting Flashcards
Cards in this set: Term What is the accounting policy for Property, plant and equipment? Definition Property, plant and equipment are stated at their original price, and except for land, depreciated. Term What is the accounting policy for depreciation? Definition The cost less residual value of property, plant and equipment (except for land) is depreciated over their estimated useful lives. Term What are prepayments and what is the balance day adjustment for it? Definition Prepayments are items the business has already paid for, part of which relates to the next accounting period. This is a CURRENT ASSET. Prepayments - Dr Expense (eg. Insurance, rates) – Cr Term What are accrued expenses and what is the balance day adjustment for it? Definition Accrued expenses are expenses owing on balance day, but have not yet been paid. This is a CURRENT LIABILITY. Expense (eg. Wages, interest) - Dr Accrued Expenses – Cr Term What is accrued income and what is the balance day adjustment for it? Definition Accrued income is income that has been earned but has not yet been received in the current accounting period. This is a CURRENT ASSET. Accrued income - Dr Interest owing/dividends – Cr Term What is income received in advance and what is the balance day adjustment for it? Definition It is income that is belonging/relating to that in the next accounting period. This is a CURRENT LIABILITY Rent Received (or any other form of income) - Dr Income in Advance – Cr Term What is plant, property and equipment and what is the balance day adjustment for it when purchased on credit? Definition Plant, property and equipment is a NON CURRENT ASSET. It was a form of P.P.E. that was purchased BY the business. Office equipment (or any other P.P.E. that was purchased) - Dr GST - Dr Accounts Payable (and name of business) – Cr Term What is the balance day adjustment for depreciation? Definition Depreciation expense - name of asset - Dr Accumulated Depreciation - name of asset – Cr Term What is the equation for depreciation expenses? Definition Cost Price - Residual/Salvage value divided by Estimated useful life =Depreciation expense Term What are the types of assets found in the income statements "Finance Costs"? Definition Interest Term What are the types of assets found in the income statements "Administrative Costs"? Definition Office expenses, rent, telephone, office wages/salaries, depreciation on office equipment/buildings, accountancy fees etc Term What are the types of assets found in the income statements "Distrubution Costs/'insert asset name here' costs"? Definition Shops, sales wages, advertising, vehicle costs, rent on shop, shop electricity, depreciation on shop fittings/vehicles Term what does accrued mean? Definition Owing