Bookkeeping NC III flashcards
Bookkeeping NC III · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Accounting Equation
- Assets = Liabilities + Equity. Every transaction keeps this equation in balance because it affects at least two accounts.
- Double-Entry Rule
- Each transaction is recorded with equal total debits and total credits across two or more accounts, allowing the ledger to self-check.
- Normal Balance
- The side on which an account increases: assets and expenses are debit-balance; liabilities, equity, and income are credit-balance.
- Trial Balance
- A listing of all ledger account balances at a given date; total debits must equal total credits when entries are correct.
- Source Document
- Original evidence of a transaction such as an invoice, official receipt, or petty cash voucher, used to support a journal entry.
- Posting
- Transferring amounts from the journal to the corresponding ledger accounts, then footing and balancing each account.
- Gross Profit Formula
- Gross profit = Net sales - Cost of goods sold. It measures profit before operating expenses are deducted.
- Cost of Goods Sold
- Opening inventory plus purchases minus closing inventory. It is the cost of items actually sold during the period.
- Current Ratio
- Current assets divided by current liabilities. It measures the ability to pay short-term obligations as they fall due.
- Net Profit Margin
- Net profit divided by net sales, multiplied by 100. It shows the percentage of each sales peso that becomes profit.
- Adjusting Entries
- Entries made before statements are prepared to record accruals, prepayments, depreciation, and doubtful debt allowances.
- Closing Entries
- Entries that transfer income and expense balances to the income summary and then to equity, resetting temporary accounts.
- Deposits in Transit
- Cash receipts recorded in the books but not yet shown on the bank statement; added to the bank balance in reconciliation.
- Outstanding Cheques
- Cheques issued and recorded in the books but not yet cleared by the bank; deducted from the bank statement balance.
- Bank Service Charge
- A fee deducted by the bank and shown on the statement; it must be recorded as an expense in the cash book.
- NSF Cheque
- A customer cheque returned unpaid for insufficient funds; it is deducted from the book balance and restored as a receivable.
- Imprest System
- A petty cash method where the float is restored by reimbursing exactly the amount of vouchers spent, keeping the balance constant.
- Cash Short or Over
- The difference between physical cash counted and the expected cash balance; a shortage is a debit, an overage a credit.
- Gross Pay
- Total earnings before deductions, including basic pay, overtime, allowances, and bonuses for the pay period.
- Net Pay
- Gross pay minus statutory contributions, withholding tax, and other deductions; the amount actually paid to the employee.
- SSS Contribution
- A social security contribution based on salary bracket, shared by employer and employee, remitted monthly to the SSS.
- Withholding Tax on Compensation
- Tax deducted from employee salaries using the BIR withholding tax table and remitted monthly by the employer.
- Payroll Register
- A record listing each employee's gross pay, deductions, net pay, and employer contributions for a pay period.
- Taxable Compensation Income
- Gross compensation income less non-taxable benefits and mandatory contributions; the base for computing withholding tax.
- Output VAT
- VAT charged on sales, generally 12% of the taxable gross amount, and recorded as a liability until remitted.
- Input VAT
- VAT paid on purchases supported by VAT invoices; it is credited against output VAT to arrive at VAT payable.
- VAT Payable
- Output VAT minus allowable input VAT for the period; a negative result may be carried over as excess input VAT.
- Percentage Tax
- A tax on gross receipts for non-VAT registered businesses, commonly 3%, recorded as an operating expense or tax payable.
- BIR Form 1601-C
- Monthly remittance return for withholding tax on compensation, filed and paid by the employer for each month.
- Chart of Accounts
- A numbered list of all accounts used by the business, grouped by type, and set up first in any accounting software.
- Audit Trail
- A system log recording who entered each transaction and when; entries are reversed rather than deleted to preserve history.
- Role-Based Access
- Assigning software permissions by job function so each user can only view or post to the modules they need.