QUEEN ANNE SCHOOL

MODULE IN FUNDAMENTALS OF ACCOUNTANCY BUSINESS AND MANAGEMENT 2

Week 1

Reference Number: 202012A1-01

Name: Grade and Section:
Subject Teacher: Ms. Monica Joyce B. Naperi LRN:
I. OBJECTIVES
The learners should be able to:
1. identify the elements of the SFP and describe each of them (ABM_FABM12-Ia-b-1)
2. classify the elements of the SFP into current and noncurrent items (ABM_FABM12-Ia-b-2)
3. prepare the SFP of a single/sole proprietorship (ABM_FABM12-Ia-b-3)
4. prepare an SFP using the report form and the account form with proper classification of items as current and noncurrent
(ABM_FABM12-Ia-b-4)
Learning Targets
At the end of the topic, learners should be able to:
 I CAN reflect on the importance of preparing the SFP.
 I CAN reflect on the separation of current and noncurrent items in the SFP
 I CAN reflect on the difference of the report form and the account form
II. SUBJECT MATTER
TOPIC: Statement of Financial Position (SFP)
CONTENT:
1. Definition of the term Statement of Financial Position and introduction of the term Permanent Accounts
2. Difference between the Report Form and Account Form
3. Difference of the Statement of Financial Position of a Service Company and of a Merchandising Company
III. LEARNING RESOURCES
The Commission on Higher Education in collaboration with the Philippine Normal University
Teaching Guide for Senior High School FUNDAMENTALS OF ACCOUNTANCY, BUSINESS, AND
MANAGEMENT 2 SPECIALIZED SUBJECT | ACADEMIC - ABM
https://drive.google.com/file/d/0B9Eg9DdzmSYCa2p4TWxJWFJhUTg/view
IV. PROCEDURE
 Familiarize the Definition of the term Statement of Financial Position and introduction of the term Permanent
Accounts
 Determine Difference between the Report Form and Account Form
 Determine Difference of the Statement of Financial Position of a Service Company and of a Merchandising
Company
V. ASSESSMENT
Problem Solving
Day 1. Activity 1
Day 2. Activity 2 numbers 1-4
Day 3. Activity 2 number 4 and 6

VI. AGREEMENT ENRICHMENT

Read and answer the given activities & assessment for the week. Submit your output on specified date of retrieval
Noted by :

____________________________________
Name and Signature of parents/guardian
____________________________________
Date
DAY 1
Definition of the term Statement of Financial Position and introduction of the term Permanent Accounts
STATEMENT OF FINANCIAL POSITION – Also known as the balance sheet. This statement includes the amounts
of the company’s total assets, liabilities, and owner’s equity which in totality provides the condition of the company on a
specific date. (Haddock, Price, & Farina, 2012)
PERMANENT ACCOUNTS – As the name suggests, these accounts are permanent in a sense that their balances remain
intact from one accounting period to another. (Haddock, Price, & Farina, 2012) Examples of permanent account include
Cash, Accounts Receivable, Accounts Payable, Loans Payable and Capital among others. Basically, assets, liabilities and
equity accounts are permanent accounts. They are called permanent accounts because the accounts are retained
permanently in the SFP until their balances become zero. This is in contrast with temporary accounts which are found in
the Statement of Comprehensive Income (SCI). Temporary accounts unlike permanent accounts will have zero balances at
the end of the accounting period.
CONTRA ASSETS – Contra assets are those accounts that are presented under the assets portion of the SFP but are
reductions to the company’s assets. These include Allowance for Doubtful Accounts and Accumulated Depreciation.
Allowance for Doubtful Accounts is a contra asset to Accounts Receivable. This represents the estimated amount that the
company may not be able to collect from delinquent customers. Accumulated Depreciation is a contra asset to the
company’s Property, Plant and Equipment. This account represents the total amount of depreciation booked against the
fixed assets of the company.
visit youtube.com and view this link: https://www.youtube.com/watch?v=mhmaHayMha8
Difference between the Report Form and Account Form
Report Form
A form of the SFP that shows asset accounts first and then liabilities and owner’s equity accounts after. (Haddock, Price,
& Farina, 2012) The balance sheet shown earlier is in report form.
Account Form
A form of the SFP that shows assets on the left side and liabilities and owner’s equity on the right side just like the debit
and credit balances of an account. (Haddock, Price, & Farina, 2012) a. Emphasize that the two are only formats and will
yield the same amount of total assets, liabilities and equity b. Emphasize that assets should always be equal to liabilities
and equity
DAY 2
CONTINUATION
Group accounts under Current Assets, Noncurrent Assets, Current Liabilities, Noncurrent Liabilities and Owner’s
Equity
Current Assets
Assets that can be realized (collected, sold, used up) one year after year-end date. Examples include Cash, Accounts
Receivable, Merchandise Inventory, Prepaid Expense, etc.
Current Liabilities
Liabilities that fall due (paid, recognized as revenue) within one year after yearend date. Examples include Notes
Payable, Accounts Payable, Accrued Expenses (example: Utilities Payable), Unearned Income, etc.
Current Assets are arranged based on which asset can be realized first (liquidity). Current assets and current liabilities
are also called short term assets and shot term liabilities.
Noncurrent Assets
Assets that cannot be realized (collected, sold, used up) one year after yearend date. Examples include Property, Plant and
Equipment (equipment, furniture, building, land), Long Term investments, Intangible Assets etc. Noncurrent Liabilities –
Liabilities that do not fall due (paid, recognized as revenue) within one year after year-end date. Examples include Loans
Payable, Mortgage Payable, etc.
Noncurrent assets and noncurrent liabilities are also called long term assets and long-term liabilities.
DAY 3
CONTINUATION
Difference of the Statement of Financial Position of a Service Company and of a Merchandising Company
The main difference of the Statements of the two types of business lies on the inventory account. A service company has
supplies inventory classified under the current assets of the company. While a merchandising company also has supplies
inventory classified under the current assets of the company, the business has another inventory account under its current
assets which is the Merchandise Inventory, Ending.
The different parts of the Statement of Financial Position
a. Heading
i. Name of the Company
ii. Name of the Statement iii. Date of preparation (emphasis on the wording – “as of”)
b. Sample of a Report Form SFP – Refer to the one above
c. c. Sample of an Account Form FP

ASSETS=LIABILITIES+ OWNE R' S EQUITY

 Self-learning activities/Assessment in Accountancy and Business Management 2
Quarter 1/Week /August

Name: _____________________________ Grade and Section: __________________

Subject teacher: _____________________ Score:

DAY 1
ACTIVITY 1. Answer the following questions
Easy:
1. Learning is Fun Company had current assets amounting to Php 100,000. Noncurrent assets for the year totaled Php
76,000. How much is the company’s total assets?
2. Happy Selling Company’s total liabilities amounted Php 10,000. Total equity had an ending balance of Php 20,000.
How much is total assets?
Medium:
1. Happy Selling’s had the following accounts at year end: Cash-250,000, Accounts Payable-70,000, Prepaid Expense-
15,000. Compute for the company’s current assets. Answer: P265,000.
2. Happy Selling’s Accounts Receivable amounted to Php 500,000. Prepaid Expense and Unearned Income totaled Php
30,000 and Php 10,000 respectively. Cash balance amounted to Php 100,000 while Accounts Payable and Inventory
totaled to Php 20,000 and Php 10,000 respectively. How much is the company’s current assets? Current liabilities?
Answer: P640,000 and P30,000
Difficult
1. Company’s Total Liabilities and Equity amounted to Php 285,000. Total noncurrent assets ended at Php 85,000. Cash
totaled Php50,000. Inventory amounted to Php100,000. Assuming the company had no other assets, how much is
Accounts Receivable? Answer: P50,000.
2. Total assets amounted to Php575,000. Total equity amounted to Php 250,000. Accounts Payable amounted to Php
50,000 while Unearned Income totaled Php 85,000. Assuming there are no other current liabilities, compute for the
company’s noncurrent liabilities. Answer: P190,000
DAY 2
Activity 2. Solve the following problems.
1. If assets are Php17,000 and owner's equity is Php10,000, liabilities are ___________________.
2. At the end of the first month of operations for Juana’s Delivery Service, the business had the following accounts:
Accounts Receivable, Php1,200; Prepaid Insurance, Php500; Equipment, Php36,200 and Cash, Php40,650. On the same
date, Juana owed the following creditors: Nena’s Supply Company, Php12,000; Maria’s Equipment, Php9,500.The current
assets for the Juana’s Delivery Service are _________.
3. At the end of the first month of operations for Juana’s Delivery Service, the business had the following accounts:
Accounts Receivable, Php1,200; Prepaid Insurance, Php500; Equipment, Php36,200 and Cash, Php40,650. On the same
date, Juana owed the following creditors: Nena’s Supply Company, Php12,000 (due in 6 months); Maria’s Equipment,
Php9,500 (due after 2 years). Current liabilities are _________.
4. If during the year total assets increase by Php75,000 and total liabilities decrease by Php16,000, by how much did
owner's equity increase/decrease?
DAY 3
5. Prepare a Statement of Financial Position using the following accounts (one in report form and one in account form):
Cash – 5,000
Loans Payable – 77,500
Accounts Receivable – 2,600
Supplies – 2,300
Equipment – 17,000
Owner’s equity – 40,000
Accounts Payable – 22,400 Building – 113,000
6. You were hired by Mr. Juan Dela Cruz to prepare his sari-sari store’s Statement of Financial Position. In order to
prepare the statement, you identified the following assets and liabilities of Mr. Dela Cruz:
a. His sari-sari store has cash deposited in a bank account amounting to P50,000
b. His sari-sari store had a lot of uncollected sales from customers amounting to P75,000
c. The total amount of merchandise left inside the store is P30,000
d. He already paid one year’s rent in advance amounting to P12,000
e. The value of all the company’s furniture amounted to P100,000
f. He bought merchandise from his supplier amounting to P25,000 and the supplier agreed that payment can be made 2
months after year-end
g. SSS, Philhealth and Pag-ibig Payables for his one employee totaled P5,000
h. The sari-sari store had outstanding liabilities to utility companies amounting to P3,000
i. He had a loan from the bank amounting to P50,000 to be paid in 3 years
Prepare a Statement of Financial Position for the company (one in report form and one in account form)

Write your answer on a separate yellow paper.