Chapter 1, Problem 8APSA

To determine

Concept introduction:

Account Payables: For delivered goods or services, the cash owed by the business which they need to pay to their suppliers is called account payables. In the balances sheet, the account payables are shown as liabilities.

Account Receivables: For delivered goods or services, the cash owed by the customers that they need to pay to the business is called account payables. In the balances sheet, the account payables are shown as Assets.

Asset: A resource which will generate a cash flow in a future for an individual, company or corporation is known as an asset. It will have an economic value and helps to reduce expenses, benefits the firm’s operations and improve sales. An asset is mentioned on the credit side of the balance sheet.

Liabilities: During the course of the business operations, an obligation or the company’s debit that arises is called liabilities. Mortgages, accounts payables, accrued expenses; loans are recorded on the right hand side of the balance sheet.

Equity: Equity is the value of an asset less the amount of all liabilities on that asset. It can be represented with the accounting equation: Assets -Liabilities = Equity.

Income Statement: The statement in which the profit or the loss of a company is mentioned is called income statement. In the income statement revenues, expenses, net income, profit and loss will be mentioned. It is also a statement which gives us the effects of expenses and profit in a stipulated time period.

1. To write: The statement showing accounting transactions with balance after each transaction

To determine

2. To calculate: The Company’s net income