Republic of the Philippines

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

Santa maria bulacan campus
Santa Maria, Bulacan

Name: Cruz, Aiyana Gabrielle M.

Section: BSA 2-1
Date and Time of Submission: December 3, 2021 (12:00 PM)

CONCEPTUAL FRAMEWORKS AND ACCOUNTING STANDARDS

ANSWERS TO LESSON MODULES
03 LESSON: PAS 1 PRESENTATION OF FINANCIAL STATEMENTS (PART 1)

RESEARCH ANALYSIS
Discussion Questions: Write your answer in a yellow sheet paper.
1. Define the statement of financial position.
The statement of financial position, also known as the balance sheet, is a financial
statement that shows the assets, liabilities, and equity of a company on a specific date,
whether it's a sole proprietorship, a business partnership, a corporation, a private
limited company, or another organization like the government or a not-for-profit
organization. It aids in revealing the company's financial position as of a specific date.

2. Define asset. Give example of current and noncurrent assets.

In financial accounting, an asset is any resource that a business or economic entity owns
or controls. It is anything that can be used to generate positive economic value (tangible
or intangible). A piece of machinery, a financial security, or a patent, for example, can
often generate cash flows in the future.

Examples of current assets are Cash and Cash Equivalents, Accounts Receivable, Prepaid
Expenses, Inventories, Marketable securities, and other liquid assets.

On the other hand, the examples of noncurrent assets are Land, Property, Plant and
Equipment (PPE), Intellectual Properties, and Goodwill. Both fixed assets, such as PP&E,
and intangible assets, like trademarks, fall under noncurrent assets.
3. Define liability and give example.
 The term "liability" refers to the obligations that your company must meet. Liability is a
term that simply means "credit."

A liability must do three things: it must present the business with an obligation; it must
be the result of past events; and it must be settled with valuable resources.

Liabilities are any debts owed by your company, including bank loans, mortgages,
unpaid bills, IOUs, and any other sum of money owed to another party. A liability exists
when you have promised to pay someone a sum of money in the future but have yet to
do so.

4. What are the elements of stockholder’s equity?

Outstanding shares, additional paid-in capital, retained earnings, and treasury stock are
all included in the shareholders' equity calculation. If a company's shareholders' equity
is positive, it means it has enough assets to cover its liabilities; if it's negative, it means it
has more liabilities than assets.

5. What is the purpose of the notes to financial statement?

The supplemental notes to a company's published financial statements are known as
financial statement notes. The primary objective of the notes to financial statements is
to clarify accounting techniques utilized by a company and to provide information that
occurred during and soon after the accounting period ended.

Assignment
The statement of financial position shows the entity’s financial condition, give five (5) for each
line items included assets, liabilities and stockholder’s equity.

ASSETS
 Cash
 Cash equivalents
 Prepaid Expenses
 Receivables
 Property, Plant and Equipment

LIABILITY
 Accounts Payables
 IOUs
 Wages Payable
 Withholding Tax Payable
 Interest Payable

STOCKHOLDERS’ EQUITY
  Treasury Stocks
 Retained Earnings
 Paid-in Capital
 Common Stock
 Outstanding Shares

FORMATIVE ASSESSMENT
1. C
2. B
3. C
4. D
5. B
6. A
7. D
8. C
9. D
10. A