Subject: Accountancy Business and Management 2

Time: 8:15 – 9:15 A.M.

Date: January 16, 2019
Gr. & Sec.: 12-GA-2A
Quarter:3rd
Lesson: 8
I. Objective:
A. CONTENT STANDARD
The learners demonstrates understanding of;
 The service income and operating expenses of a service business as well as sales, contra sales, purchases, contra
purchase accounts, cost of goods sold and general administrative and selling expenses of a merchandising
business that will equip him / her in the preparation of the SCI for both service and merchandising businesses

B. PERFORMANCE STANDARD
The learners shall be able to:
 Solve exercises and problems that require preparation of an SCE for a service business and a merchandising
business.

C. LEARNING COMPETENCIES
 Identify the elements of the SCI and describe each of these items for a service business and a merchandising
business (ABM_FABM12-Ic-d-5)

II. CONTENTS
 Statement of Comprehensive Income (SCI)

III. LEARNING RESOURCES

 References: Fundamentals of Accountancy, Business & Management 2, Rafael Lopez, Jr. (pg. 31 – 35)
 Materials: Visual aid
 Values: Accountability

IV. Procedure
A. Reviewing previous lesson or presenting the new less
- What are the two (2) forms of Statement of Financial
Position The forms of Statement of Financial Position are:
1. Report form
2. Account form

B. Establishing a purpose for the Lesson

What is the permanent accounts in the business? - The permanent accounts in the business are:
1. Revenue or income
2. expenses

C. Presenting examples / Instances of the Lesson Presenting example / Instances of the Lesson
Activity
Prepare a Personal SCI:
a. Write monthly allowance (computed by daily allowance x
number of days in a
month)
b. Write the amount you spend on food, transportation, phone
load, etc. (make it
monthly to match their allowance)
c. Deduct the amount you spend from the amount of your
allowance

D. Discussing new concepts and practicing new skills #1.

1. What are the elements of Statement of
The three (3) elements of Comprehensive Income are:
Comprehensive Income?
1. Revenues or Income
2. Cost
3. Expenses

 The three (3) elements of Statement of

2. Describe each elements of Statement of
Comprehensive Income
Comprehensive Income.
1. Revenue or Income – refers to proceeds from the
sale of merchandise. It also includes Sales Returns
 and allowance and sales Discounts which are both
reduction from Sales Account.
Sales Returns and allowances is deducted from
Sales because this represents return of
merchandise sold may be due to some damages
or not conforming with orders while Sales
Discounts are incentives given to customers for
early collection of their accounts within the
discount period.
Income – refers to rendering of professional
services to clients or patients like legal fees
income for lawyers, accounting and auditing fees
for accountants, medical fees for doctors, dental
fees for dentist, or income from use by other
entities of the resources of the enterprise such as
royalties’ income, rental income, interest income,
etc.
2. Cost of Sales or Cost of Goods Sold – refers to
cost of manufacturing or selling the merchandise.
It includes the cost of purchases less Purchase
Returns and Allowances and Purchase Discounts
which are both reduction from purchases.
Purchase Returns and Allowances is deducted
from Purchases account representing the returns
of merchandise due to damages or not
conforming with the order while Purchase
Discounts refer to incentives given to suppliers for
early payment of their accounts within the
discount period.
Freight- in – refers to transportation cost in
bringing the merchandise within the premise of
the business to become ready for sale.
3. Operating Expenses – this consist of expense that
is generally classified as to function of expenses
and the nature of expenses.
 Classification of Expenses as to selling or general and
administrative such as:
Selling or Distribution Expenses (Related to
Sales)
a.Freight out
b. Store Supplies
c. Uncollected Accounts
d. Taxes and Licenses
e.Sales Salaries
General and Administrative Expenses
a.Utilities
b. Rental Expense
c. Depreciation Expense
d. Insurance Expense
e.Office Salaries

There are two (2) forms of Statement of Comprehensive Income,

namely:
a. Single- step form – to be used in service concern or
merchandising business under “perpetual inventory
system”.
b. Multiple- step form – to be used in merchandising
business under “periodic inventory system”.

3. What are two (2) forms of Statement of

Comprehensive Income?

E. Discussing new concepts and practicing new skills #2

 Example of the elements of Statement of Comprehensive
Income:
  Revenues

 Cost of Sales or Cost of Goods Sold

 Expenses

F. Developing mastery
Business can determine the results of its operation by determining
the profit or losses.
 Profit and Losses – the excess of revenues over expenses
is called “profit”. Conversely, the excess of expenses over
revenues is called “loss”.

To illustrate:

Revenue or Income Pxx

Less: Cost and Expenses xx
Profit or Loss Pxx

How does each element important in the operation of the

business?

G. Finding practical applications of concepts and skills in

daily living (application)
 If you are the owner of the business, how will you
minimized your operating expense, so that you can
arrived profit?

H. Making Generalizations and abstraction about the lesson

 Describe each element of Statement of

Comprehensive Income.
 I. Evaluating Learning
Direction: Read each item carefully and encircle the letter
that corresponds to the correct answer.
(2 points each)
1. This refers to proceeds from the sale of merchandise.
a. Revenue or income c. taxes
b. Expense d. all of these
2. It includes the cost of purchases less Purchase returns and
Allowance and Purchase Discounts which are both reduction
from Purchases.
a. Revenue c. Expense
b. Cost of sales or Cost of goods sold
d. Income
3. _____________ is the last elements of Statement of
Comprehensive Income.
a. Revenue c. Expense
b. Cost of Sales or Cost of Goods sold
d. Income
4. Which of the following is NOT included in the selling or
distribution expenses?
a. Utilities expenses c. store Supplies
b. Freight out d. Uncollected accounts
5. Which of the following is EXCLUDED in the general and
administrative expenses?
a. Utilities Expense c. Depreciation
b. Rental Expense d. Taxes and Licenses
6. What do you call the excess of revenues over expenses?
a. Losses c. Income
b. Profit d. Revenue
7. The excess of expenses over revenues is called ____________.
a. Losses c. Income
b. Profit d. Revenue
J. Additional activities for application or remediation
 What are the steps in preparing Statement of
Comprehensive Income?

V. REMARKS
 The learning objectives was carried out throughout
the session.

VI. REFLECTION
A. No. of learners who earned 80% of the formative 15
assessment

B. No. of learners who require additional activities for

remediation 0
C. Did the remedial lesson work? No. of learners who have None
caught up with the lesson
D. No. of learners who continue to require remediation
None
E. Which of my teaching strategies work well? Why did these
work? Collaborative activity
F. What difficulties did I encounter which my principal or
supervisor can help me solve? Lack of learning materials
G. What innovation or localized materials dis I used/discover
which I wish to share with other teachers? Used power point presentation and tv monitor.

Prepared by:

BRENDA S. COLMINAR
Teacher