"NOTES" - shows the breakdown of the line items.

It is 5th component of
complete set of financial statement which provides narrative disclosures
and other information required by the standard but was not presented in
the other financial statement.

A "LINE ITEM" is a caption used to describe a group of accounts with

similar nature.

The following are the common line items together with their
composition:

ASSETS

Cash and cash equivalent

This line item consists of the following:

Cash P xx

Cash equivalent xx

Cash and cash equivalent P xx_

 Cash includes cash on hand and cash in the bank.

 Cash equivalents are some short-term debt securities that are acquired 3
months prior to their maturity.
Trade and other receivables

Trade Receivables - are receivable arising from the sale of goods or

services in the ordinary course of business. This includes trade accounts
receivable and trade notes receivable. Receivable arising from other sources
are nontrade receivables.

a. trade receivable is presented as current assets if they are

collectible within the normal operating cycle, even if the operating cycle is
longer than 12 months.

b. Non-trade receivable - are presented as current assets only if

they are collectible within 12 months from the end of the reporting period.

This line item consists of the following:

Account Receivable P xx

Allowance for bad debt ( xx )

Notes Receivable xx

Advances to supplier xx

Trade and other receivable P xx

 only the current portion of the notes receivable is included in 'trade and
other receivable"
 advances to supplier - is an account used to record an advance payment
made to suppliers for purchases of inventories that have not yet been
delivered by the supplier.

Inventory

These line items consist of goods held for sale in the ordinary course
of business.
Prepaid assets

This line items consist of the following:

Prepaid supplies P xx

Prepaid Rent xx

Prepaid insurance xx

Prepaid
Assets P xx__

The term "prepaid assets" is also referred to in traditional

accounting as "prepaid expenses".

Property, Plant and Equipment

This line items consist of the following:

Land P xx

Building xx

Accumulated depreciation-bldg (xx)

Equipment xx

Accumulated depreciation-
Equipment (xx)
Property, plant, and equipment P xx

"Property, plant, and equipment" commonly abbreviated as

PPE are also known as fixed assets.
LIABILITIES

Trade and Other Payables

Trade Payables - are payable arising from purchases of inventory

that are sold in the ordinary course of business. This includes trade account
payable and trade notes payable. Payable arising from other sources are
nontrade payables.

a. trade payable are presented as a current liability if they are

payable within the normal operating cycle, even if the operating cycle is
longer than 12 months.

b. Non-trade payable - are presented as current liability only if

they are payable within 12 months from the end of the reporting period.
 This line item consists of the following :

Account Payable P xx

Notes Payable xx

Interest Payable xx

Salaries Payable xx

Utilities payable xx

Unearned income xx

Trade and other Payables P xx

Non-trade notes payable that represent bank loans are most

commonly excluded from "trade and other payables" line items and
presented separately.

Short -term borrowing

Line items consist of loans with an original term of 1 year or less.

Current portion of long-term borrowing

Line items consist of the portion of a long-term loan that is

maturing within 12 months from the end of the reporting period.

Long -term borrowing

Consists of loans with an original term of more than 1 year.

Income tax payable (Current tax payable)

Line items consist of unpaid income taxes due to the national

government.