Angel Anne Alcantara
*FABM REPORT GUIDE*
credit - the ability of a customer to obtain goods or services before payment, based on the trust
that payment will be made in the future.
Debit- When your bank debits your account, money is taken from it and paid to someone else.
(MEANING OF COMPREHENSIVE INCOME)
~Income Statement >> Also called a profit and loss statement, is a report made by company
management that shows revenues, expenses and net income or loss for a period.
~Net income>> is the positive result of a company's revenues and gains minus its expenses and
losses. Nakuhang kita, na nabawas na ang lahat ng nagastos.
~Net loss>> Net loss is the excess of expenses over revenues.Mas Malaki ang nagastos kaysa sa
kinita.It is a negative result sa isang company.
(MEANING OF TEMPORARY ACCOUNTS)
>>>> Temporary accounts refer to accounts that are closed at the end of every accounting
period. These accounts include revenue, expense, and withdrawal accounts. They are closed to
prevent their balances from being mixed with those of the next period. Also known as: Nominal
accounts, Income statement accounts. Is an account that is closed at the end of every
accounting period to start a new period with a zero balance.
(DIFFERENCE OF SCI OF A SERVICE AND MERCHANDISING)
Revenue>>> Kita
Kayleigh and Lilly are both business owners. Kayleigh is the owner of Gifts Galore, a
unique little gift shop that sells directly to the public. Lilly is the owner of Lilliana's Warehouse,
a company that only sells its merchandise to business owners. Kayleigh orders a good bit of the
merchandise she sells in her shop from Lilly. Both of these businesses are merchandising
companies.
>>>>Merchandising company is a company that buys goods and then resells them, generally
for a higher price than they were purchased. There are two types of merchandising companies -
retail and wholesale. A retail company is a company that sells products directly to customers,
where a wholesale company is a company that buys items in bulk from manufacturers and
resells them to retailers or other wholesalers.
Selling expenses>>Selling expenses are the costs associated with distributing, marketing and
selling a product or service. They are one of three kinds of expense that make up a company’s
operating expenses. Selling expenses can include: Distribution costs such as logistics,
shipping and insurance costs. Marketing costs such as advertising, website maintenance and
spending on social media. Selling costs such as wages, commissions and out-of-pocket
expenses.
Administrative expenses>>Administrative expenses are business expenses that are not related
to the cost of goods or sales, such as salaries of office staff, insurance, and legal and accounting
costs. Administrative expenses are necessary costs that are associated with the management,
administrative, clerical, and general functions within an organization. Administrative expenses
can take the form of such basic needs as rent of the building, the cost of utilities, or the salaries
of employees that are not involved in the production of goods or supply of services. The salaries
of executives cost of services (such as accounting, contracting, and industrial relations) are the
examples of administrative expenses.
One of the most common examples of administrative expenses is the cost of utilities. Charges
for heating, cooling, power, and water are all usually classified as administrative expenses. The
costs for internet, landline and mobile telephone services are also included in these expenses.
The cost of leasing or renting space for the operations of the organization is also a common
example of administrative expenses. This can include rental cost of a suite of offices in an office
building, or the rental of manufacturing plant. In some cases it might be successfully argued
that the rental cost of production facility should be attributed to the production costs of goods.
Salaries of certain employees can also be included in the administrative expenses. The salaries
of managers and general administrators, who are involved many different areas of the
operations, can be included in administrative expenses. The directors’ remuneration and
salaries of senior executives can also be included.
