FUNDAMENTALS OF

ACCOUNTANCY, BUSINESS &

MANAGEMENT 2
Quarter 1 Module 1 Week 1
Statement of Financial Position
(SFP)
 GRADE 12

_Learning Module for Senior High School Accountancy , Business and Management

The following are some reminders in using this module:

1. Use the module with care. Do not put unnecessary mark/s on any part of
the module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities included
in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not hesitate to consult
your teacher or facilitator. Always bear in mind that you are not alone.
We hope that through this material, you will experience meaningful learning and gain
deep understanding of the relevant competencies. You can do it!

What I Need to Know

This module was written for you to accomplish at home. It was carefully
designed so that you can work at your own pace and allow self-discovery of
the concept through activities that you will perform. Activities were also selected to
allow independent learning which also aims to develop students’ reading
comprehension skills through understanding written texts.

After going through this module, you are expected to:

1. Identify the elements of the SFP and describe each of them
2. Prepare an SFP using the report form with proper classification of items as
current and non- current
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_Learning Module for Senior High School Accountancy , Business and Management

What I Know
As a prerequisite to FABM2 is FABM1. You must recall through your stock
knowledge the Elements of Financial Statements. The basic purpose of accounting is
to provide information that is useful for making economic decision Accounting
information is most commonly communicated to users of accounting information
through the financial statements.
Instruction: Fill in the blank with the correct answer (Critical Thinking,
Communication and Collaboration)

1. The book of original entry.

2. Assets are equal to liabilities and owner’s equity.

3. Users of accounting information is mostly communicated

4. Are what the company owns.

5. Are what the company owed.

6. Inflows of cash because of services rendered.

7. Assets from cash spent because of sales of goods.

8. The second accounting cycle.

9. Is called the book of the final entry.

10.is the next cycle after journalizing.

Please check your answer.

1. Journal 6. Income
2.Accounting equating 7. Expenses
3.Financial 8. Journalizing
Statement 9. Ledger
4.Assets 10. Posting to
5.Liabilities ledger
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_Learning Module for Senior High School Accountancy , Business and Management

Instructions: Write True if the statement is correct and False if the statement
is incorrect (Collaboration)

1. The left side of the account is Debit

2. The permanent accounts are the nominal account.
3. The right side of the account is credit.
4. The elements of the statement of financial position are Assets and
expenses.
5. Current Assets are easily convertible into cash within the
normal operating cycle of the business
6. The elements of Statement of financial position are Assets,
Liabilities and Owner’s Equity account.
7. Kinds of Assets are Current Assets and Non-Current Assets
8. Kinds of Liabilities are Current Liabilities and Non-Current
Liabilities
9. Under owner’s Equity Account includes Capital, Owner’s
withdrawal, Revenue and Expenses.
10. Account form and Report form are the two kinds of forms of the
Statement of Financial Position

The answer for no. 2 is false because

permanent account is real account. Like
All are true assets, liabilities and owner’s equity
except no. 2 and account
no.4. Explanation The answer for no. 4 is false because the
is at the right elements of Statement of financial position
are Assets, Liabilities and Owner’s Equity
account
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_Learning Module for Senior High School Accountancy , Business and Management

STATEMENT OF
MODULE 1 FINANCIAL POSITION

Financial statements are structured representation of an entity’s financial position

which is balance sheet and results of its operations which is the statement of
performance. Financial statements are product of the accounting process.
The elements of the financial positions are as follows:
1. Assets are resources you control that have resulted from past events and
can provide you with the future economic benefits

2. Liabilities are your present obligations that have resulted from past
events and can require you give up resources when settling them.

3. Equity means assets minus liabilities. Other terms for equity are
capital, net assets, and net worth.

The above elements are termed Permanent Accounts because their life or
usefulness continues throughout the life of the company.

What’s In
I want you to identify all the Assets, Liabilities and Owner’s Equity of your
family. You can ask your family members to help you identify the elements of the
financial position.

Independent Activity 1.1: My Family’s Financial Posit (Critical - Thinking, Creativity,

Character and Collaboration)

Instructions: Cut out pictures from magazines or you can take a picture or draw all
your family’s assets, I want you to identify all the liabilities, and the owner’s equity
account. Make a reflection of what your family need to do in order to make
the Financial Position more attractive.
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_Learning Module for Senior High School Accountancy , Business and Management

LIABILITIES
EQUALS
ASSETS +
OWNER’S EQUITY

Notes to the Teacher

Students can borrow books from their neighbor about the accounting or can
browse the notes in FABM1 for understanding the topics of “Statement of
Financial Position” repetition of the words and it use will make the students
remember and retain those account titles in their mind as stock knowledge.
Note: For learners who are using online platform
The learning module emphasizes on the 5-C skills being developed by the
learners through the activities – (Communication, Collaboration, Creativity,
Critical thinking and Character Building).

What’s New

If you can answer scramble words, you can answer the questions given below.

1. What are the two forms of 1. CCAONTU

Statement of Financial OEPRT
Position?
2. RCRUENT SSTEA
2.What are the kinds of TNERURCR ONN
Assets?
3. RCRUENT ABLETISI
3.What are the kinds of GNOL ETMR ABLETISI
Liabilities
8
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_Learning Module for Senior High School Accountancy , Business and Management

There are two forms of statement of financial position, the report

form and account form. Report form is usually the form used for submission
to the government agencies and financial institution such banks. You can use
any of the form depending on the one who makes the report in the company.
See table below for the format

Suresh Company Statement of

Financial Position As of
December 31,2020

Assets Liabilities & Owner’s Equity

Cash P10,000 Accounts Payable P 5,000
Accounts Receivables 5,000
Supplies 1,000 Owner’s Capital 35,000
Equipment 4,000
Total Asserts P40,000 Total Liabilities & 40,000
Owner’s Equity

The format given above is the Account form. All assets are found on the
left side of the account and the liabilities and owner’s equity account
are found on the right side of then account

The table below shows the Report form format for the statement of
financial position. Assets, liabilities and owner’s equity accounts are in
one direction. You must place the assets first, then the total liabilities and
owner’s equity account. This is usually the format that will be submitted to
the government and private agencies such as Banks. Financial
institutions, Bureau of Internal Revenue, City Treasurer’s office and others.
 GRADE 12

_Learning Module for Senior High School Accountancy , Business and Management

HEADING

CURRENT ASSETS

NON-CURRENT
ASSETS

CURRENT LIABILITIES

LONG TERM
LIABILITIES

OWNER’S EQUITY

What’s More
Independent Activity 1.1 (Critical Thinking and Communication)
This time, I want you class to do the following task alone. Make sure to answer them
correctly.
Instructions: Choose the answer that corresponds for each of the question

provided below: Write letter only of the best letter.

1. Information about the revenue and expenses is provided by

a. Statement of changes in equity
b. Statement of Cash Flow
c. Statement of Financial position
d. Statement of performance
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_Learning Module for Senior High School Accountancy , Business and Management

2. Information on changes in Assets, Liabilities and Owners Equity account

a. Statement of changes in equity
b. Statement of Cash Flow
c. Statement of Financial position
d. Statement of performance
3. Cash, Cash Equivalents, merchandise inventory are classified as
a. Current Liability
b. Current Asset
c. Long Term Liability
d. Owner’s Equity

4. The following are examples of contra asset account except

a. Accumulated depreciation- Equipment
b. Accumulated depreciation-Building
c. Bad debt Expense
d. Allowance for Bad Debts
5. The elements of financial Statements are
I Assets IV Income
II Liability V Expenses III
Equity
a. I, II, IV, V
b. I, II, III
c. IV, V, I
d. I, II, III, IV, V

Note: If you failed to score at least

four (4) out of five (5), please
answer activity 1.2

Activity 1.2 (Critical Thinking)

Instructions: Choose the correct answer by writing the correct letter/s of
your choice
1`. The elements of the financial statements include
1. Assets 4. Income
2. Liabilities 5. expenses
3. Equity
a. 1, 2 and 3 c. 1, 2 and 3
b. 1, 2, 3, 4 and 5 d. 1, 4 and 5
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_Learning Module for Senior High School Accountancy , Business and Management
2. Information of the financial performance is provided by
a. Statement of profit and loss
b. Statement of changes in owners
c. Statement of financial position
a. Cash flow statement
3. The following are terms used synonymously with equity except
a. Capital c. Net worth
b. Net Assets d. Revenue
4. The following are examples of current Assets except
a. Cash b. Accounts c. Prepaid Expenses
b. Accounts Receivables d. Unearned Income
5. These are easily convertible into cash within the normal operating cycle
of the business
a. Current liabilities c. Equity
b. Current Assets d. non -current assets

Independent Activity 2.1:

Instruction: Solve for the accounting

equation.

Remember the Accounting Equation?

Assets is equals to Liability and Owner’s Equity Account

1. Angels Tutorial Center has an asset amounting to P 200,000, Liability is P 75,000.

How much is the owner’s equity account?
2. Assets of TMAM is P15,000 and Total Equity is P10,000, how much is total
Liabilities?
3. Assets is equal to P350,000, Owner’s equity is 250,000, How much is Equity?
4. Sure Fresh Company’s total liabilities amounted P30,000. Total equity
had an ending balance of P50,000. How much is total assets?
5. Current Assets is P50,000, Non- Current Assets is P150,000.00, Current Liabilities
is P10,000 and Non- Current Liabilities is P40,000, How much is the Equity of the
company?

Look at the answer key provided on page 16. You must answer the next activity if
you didn’t get at least 4 out of 5 from the above activity.
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_Learning Module for Senior High School Accountancy , Business and Management

Independent Activity 2.2 (Critical Thinking)

Instructions: Solve for the unknown: In answering the problems below, you must have
to recall the kinds of assets and liabilities account and their examples.

1. Theone Company had the following accounts at year end: Cash-150,000,

Accounts Payable-70,000, Prepaid Expenses-35,000. Compute for the
company’s current assets.

2. Theo Company’s Accounts Receivable amounted to P500,000. Prepaid Expense

and Unearned Income are 30,000 and 10,000 respectively. Cash balance
amounted to P100,000 while Accounts Payable and Inventory are P20,000 and P
10,000 respectively. How much is the company’s current assets? current
liabilities?

3. Company’s Total Liabilities and Equity amounted to P825,000. Total non-current

assets ended at P 550,000. Cash totaled P50,000. Inventory amounted to
Php100,000. Assuming the company had no other assets, how much is the
accounts receivable?

4. Total assets amounted to P755,000. Total equity amounted to P350,000.

Accounts Payable amounted to P80,000 while Unearned Income is P
85,000. Assuming there are no other current liabilities, compute for the
company’s non-
current liabilities.

5. Cash of P100,000, Accounts Receivables of P200,000, Prepaid Expenses of

P30,000.00, Equipment of P180,000 and Furniture of P20,000, How much is the
total assets?

What I Have Learned

Statement of Financial position is one of the Financial reports submitted by

the company to the users of information such as banks and other financial
institutions. They are called permanent because of their existence is continuous
and the balance is forwarded to the next accounting period. The elements of
financial position are assets, liabilities and owner’s equity account. The kinds of
Assets are Current and Non-Current while the kinds of liabilities are Current and
Long-Term Liabilities. Under current assets are cash, receivables,
Inventories and prepaid expenses. Non-current assets include Land, Building
Equipment and furniture and their accumulated depreciation. While for Current
Liabilities includes Accounts Payables and Notes Payable and for the Long-Term
Liabilities
 GRADE 12

_Learning Module for Senior High School Accountancy , Business and Management

♥♥♥What I Need to Reflect (Character)

You must buy only the important and the basic needs of the family or
buy assets that has economic benefit in the future, when you don’t have cash
do not borrow money just to acquire it. However, if you have more than enough
for your family, why not think of donating something for the less fortunate
specifically this pandemic situation.

What I can Do

Practice makes perfect! I want you to review all our lessons

learned you can check your FABM1 notes. You can prepare an SFP using
all the assets, liabilities and equity of your family. (Collaboration and
Critical Thinking)

Assessment

Instructions: Compute for the missing amount of the account titles taken from the SPF
of independent company Critical Thinking and Communication)

1. Assets are Php 27,000 and owner's equity is Php15,000, liabilities?

2. At the end of the first month of operations for TMAM Transportation, the
business had the following accounts: Accounts Receivable, Php2,800;
Prepaid Insurance, Php700; Equipment, Php85,500 and Cash, Php75,550.
On the same date, TMAM owed the following creditors: Mely’s Supply
Company, Php8,000; Mark’s Equipment, Php19,500. The current assets
for the Juana’s Delivery Service are

3. At the end of the first month of operations for Mary Anne’s, the business
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_Learning Module for Senior High School Accountancy , Business and Management
had the following accounts: Accounts Receivable, Php4,800; Prepaid
Insurance, Php15,000; Equipment, Php68,200 and Cash, Php40,650. On
the same date, Juana owed the following creditors: Bonny Supply
Company, Php42,000 (due in 6 months); Maria’s Equipment, Php90,500
(due after 2 years). Current liability is

4. If during the year total assets increase by Php85,000 and total liabilities
decrease by Php15,000, by how much did owner's equity
increase/decrease?

------------5.Using the following accounts Cash – 15,000 Loans Payable – 77,500

Accounts Receivable – 6,300, Inventory- 7,400 Supplies – 4,200Equipment
– 52,000 Owner’s equity – 98,000 Accounts Payable – 22,400 Building –
113,000,
How much is the total assets and Total Liabilities and Owner’s Equity?

References
Books

Ferrer, R., & Millan, Z. V. (2017). Fundamentals of Accountancy, Business

& Management Part 2. 1st Edition

Haddock, M., Price, J., & Farina, M. (2012). College Accounting: A Contemporary
Approach, Second Edition. New York: McGraw-Hill/Irwin.

Valencia, E. G., & Roxas, G. F. (2010). Basic Accounting (3rd ed.).

Mandaluyong City, Philippines: Valencia Educational Supply.

Teaching Guide in Senior High School Fundamentals of Accountancy Business

and Management 2, donated by the Commission on Higher Education in
Collaboration with the Philippine Normal University to Department of Education

Websites

accounting coach.com

https://www.moneymanagement.org/blog/financial-proverbs-that-are-still-true-today
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_Learning Module for Senior High School Accountancy , Business and Management

Additional Activities

Prepare a SPF for the company using report form.

Your neighbor who has a Sari- Sari store hired you 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. Martinez after he made an investment of
P159,000.00.
a. His sari-sari store has cash deposited in a bank account amounting to P50,000
b. His sari-sari store has 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, Phil health and Pag-big 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