Abrea, Mark Justine M.

BSMA 2103
Module 1
1. Describe the Conceptual Framework for Financial Reporting
Conceptual framework it is a system whereas set an objectives and concepts for
general purpose of financial reporting the main objectives of it is to provide
information on a business entity.
2. Enumerate the Objectives of a general purpose of financial reporting?
The objectives of a general purpose of financial accounting are investor which can
be leads to potential growth of a business, lenders and others creditors that can help
to make a decision about providing resources on entity.
3. Identify the Qualitative characteristics of a useful financial statement,
There are two types of Qualitative characteristics the fundamental and enhancing.
To meet the fundamentals qualitative we need a capable decisions in order to build
a relevance and also have a faithful representations that completely presented to
avoid an error or mistake on financial information.
4. Enumerate the elements of financial statements.
 Assets
 Liability
 Equity
 Income
 Expenses
5. Explain the concept of recognition, derecognition and measurement
The concept of recognition is putting or recognizing the elements of financial
statements in F.S. while derecognition is removing the assets or liabilities from
statement financial position specifically when the definition of an assets or liability
can no longer meet. Last is measurement it simply recognize the measurements of
your assets, liability, equity, income and expenses of your financial statement and is
the one of the method to identify the cost of an entity.
8. Explain the concept of capital and capital maintenance.
There are two concepts of capital the first is financial capital which based on how much
on the assets or equity of the entity and it measured by the monetary units and
purchasing power. The second type of capital is physical so it is the capacity or the
quantity of a product can produce of an entity.
9. Enumerate the complete set of financial statements.
 Statement of Profit or Loss and Other Comprehensive Income
 Statement of Changes in Equity
 Statement of Cash Flow
 Notes to the Financial Statement
10. Define the elements of financial statements.
 Assets it is the economic resources which is controlled by the entity and also
have a economic benefits for the future. Example of assets are cash, account
receivable, inventories
 Liability these are legally an obligations payable of an entity to another entity.
Example of liabilities is accounts payable,
 Equity it simply the ownership of a total assets minus the total liabilities
 Income it is increasing the assets and decreasing the liabilities that can result
an increasing of an owner’s equity
 Expenses This is the reductions of an asset or increasing the liabilities that
can result a decreasing of an owner’s equity

11.Explain the classification of assets and liabilities

The classifications of an assets are the current and non-current when you say current
assets it is the assets of an entity that can converted to cash or expected to be sold
over the next year while non-current assets it is long term assets and cannot be
realizable in a year.
The classifications of liabilities are the current and non-current liabilities. The current
liabilities is a short term obligations that are due within a year one of the example of it is
accounts payable. The other classifications is non-current liabilities which is the long
term obligations that cannot due in a year one of the best example of it is long term
investment.
Module 2
1. Explain change in accounting policies, change in accounting estimates and prior
periods. Cite examples for each.
The accounting policies is standard that set of principle, rules in presenting the financial
statement one of the example of this is FIFO METHOD.
A change in accounting estimates is an adjustment of the carrying amount of an asset
or liability, or related expense, resulting from reassessing the expected future benefits
and obligations associated with that asset or liability. One of best example of it
depreciation assets.
Prior periods error is a misstatement to a financial statement so the entity should restate
the opening balances of assets, liabilities, and equity for the earliest period for which
retrospective restatement is practicable. The example of it is miscalculated of financial
statement positions
4. Explain the presentation of the statement of cash flows.
A cash flow statement is a financial statement that summarizes the amount of cash and
cash equivalents of an entity he main components of the cash flow statement are  cash
from operating activities, investing and financing.

5.Expound the difference between cash and cash equivalents.

Cash and cash equivalents are group of assets owned by the entity. For simplicity the
cash is the value of total cash in hand while cash equivalent are the short term
investment that ready to convert into a cash.

6. Give examples of the operating activities, investing activities and financing

Example of operating activities is the cash received from the customers and cash paid
to suppliers and employees. Investing activities are the acquisition and disposal of long-
term assets and other investments and in financing is borrowing of capital of the entity.
Module 3
1.Differentiate between Income and Revenue.
Revenue is the total earned of a business entity form it’s customer for it’s services or
product while an income refers to a profit after you deducting the expenses and taxes
from revenue.

2. Discuss on how to identify contracts with customers and the performance

obligation in a contract.
In identifying contracts with the customers you should have an agreement on both
parties either writing or oral and the second is identifying the rights and have a payment
terms. Last is contract have a commercial substance.
In order to identify the performance of an obligations the customer can be benefits from
good and services, constructing to build a long term contracts and make an agreement
to a customer in order to perform it.
3.Illustrate the transaction price in the contract with customers
It is the amount whereas the entity of a business expects to received for the transfer of
goods and services to the customer and it used the different method like residual
approach.
4. Explain the recognition of revenue from contracts with customers.
In order to recognized the revenue from contracts with customers you should have an
agreement both parties which regards to income and revenue it must be increases in
economic benefit during accounting periods.
5. Expound the difference between the revenue recognition at point of time and
revenue recognition over time.
revenue recognition at point of time and revenue recognition over time have both
benefits of the entity and also create and enhances the performance. The main different
of is the a point of time don’t have an enforceable rights while over time can have a
right to received a payments.

Module 4
1. Define inventories.
Inventories is type of an asset which can be held for sale and it can be an items
or raw materials that can be use for production to make a product.

2. Explain the measurement for inventories.

There are two type of measurement for inventories, the lower of cost and net
realizable value when you say a lower of cost it is the concept of the inventories
should be record at lower at cost and net realizable value it is the expected price of
selling but when you record an inventories higher than net realizable value it should
be a write down to it’s net realizable.

3. Illustrate the costs attributable to inventories.

Inventories contains the requirements on how to account for most types of inventory.
The standard requires inventories to be measured at the lower of cost and net
realizable value and the main objectives of it is to guide and determining the cost of
inventories also recognizing expenses.
 4. Discuss the different costing methods for inventories.
First-In, First-Out method
Assumes that "the products purchased first are sold first." The inventory is thus
valued at current or new values, but the cost of items sold is valued at previous
or older prices.

Last-In, First-Out Method

The LIFO approach is no longer permitted by the standard. Assumes that the
products most recently acquired are sold first. As a result, inventory is expressed
in terms of previous or old prices, and the cost of items sold is also symbolic of
previous or old prices.

Weighted Average Method

The weighted average unit cost is calculated by dividing the cost of the beginning
inventory plus the total cost of purchases across the period by the total units
produced plus those in the beginning inventory.

Specific identification
For products that are not normally interchangeable and goods or services
created and segregated for a specific project, the cost of inventories should be
assigned by specific identification of their respective cost.

8. Differentiate the two categories of biological assets.

The two categories of biological assets are the bearer and consumable. The bearer is a
type of biological asset such as trees, plants and animals that can produced to be
harvest for the economic benefits while consumable the trees plants and animals are
themselves to be harvested.

9. Explain the recognition principle for biological assets.

An entity recognizes a biological asset only when the entity controls the asset as a
result of past events, it is probable that future economic benefits will flow to the entity,
and the fair value or cost of the asset can be measured reliably.