Nature of Accounts
Nature of Accounts
Nature of Accounts
Nature of Accounts
1.
Assets
Cash in bank- this includes demand deposit or checking account and savings
deposit which are unrestricted as to withdrawal
Debited for: Deposits, Credit memos
Credited for: Cash disbursements, Debit memos
Cash on hand- this includes undeposited cash collections and other cash
items awaiting deposit such as customers checks, cashiers or ,managers checks,
travellers check and money orders
Debited for: Cash receipts
Credited for: Payment for expenses and liabilities
Petty cash fund- money set aside to pay small expenses which to be paid
conveniently by means of check
Debited for: Establishment of fund, Increases in fund
Credited for: Decrease in petty cash fund
2.
Liabilities
Debited for: Remittances to the BIR representing income taxes withheld from
employees salaries
Credited for: The amount deducted from employees salaries as employees income
tax on their compensation
Debited for: The amount of the employer and employees contribution remitted to
SSS
Credited for: The amount withheld from the employees salaries representing
employees personal contribution to SSS, the recognition of the employers SSS
contribution liability
Debited for: The amount the employer and employees contribution remitted to Phil
Health
Credited for: The amount withheld from the employees salaries representing
personal contribution to Phil Health, the recognition of the employers Phil health
contribution liability
Vat payable
Debited for: The amount of output Vat over input vat remitted to the BIR
Credited for: The net amount of output VAT aver input VAT recognized as a liability
by the company
Utilities payable
Debited for: The amount of utilities paid to the respective collecting offices
Credited for: The amount of utilities recognized as liability
3.
Partners Capital
Debited for: Whenever there is withdrawal and whenever there is a net loss
Credited for: Whenever there is a net income and when additional investment
are made
4.
Income
Operating expense
Operating expense
Salaries expense
Business Taxes and Licenses- a fee paid to the government for the privilege of
being licensed to do business
Debited for: The amount of related business taxes and licenses paid by the
company
Credited for: Closing the periodic balance to the Operating Expense Control Account
Debited for: The amount of office supplied purchased and actually used
Credited for: Closing the periodic balance to the Operating Expense Control Account
Debited for: The amount of playing supplies purchased and actually used
Credited for: Closing the periodic balance to the Operating Expense Control Account
Income Summary
Debited for: Closing the amount of net income to the partners capital
Credited for: Closing the amount of net loss to the partners capital