Name: Castillo, Lovely

Curse, Year & Section: BSHM 3-B

ENTREP ACT. #6

A. Questions
1. What are the important things that an owner-entrepreneur should know from
the financial records of his business operation?
- Financial Statements give you a snapshot of where money is being generated, and where it's
being spent and its rather important as it contains information contained in your financial
statements because they can provide you with a health check on how the company is doing
financially.
2. Give the three basic types of financial statement and explain its importance to
an entrepreneur.
- Understanding essential financial statements such as 'Trial Balance', 'Balance Sheet', and
'Profit and Loss' statements is paramount as these are very important reports for small
businesses to ensure their competitiveness in the market.
3. What are the various sources of capital which are available to an aspiring
entrepreneur?
- Sources of Capital
o Internal Funds – obtained from the income of the business
o Trade Credit – receivables from the customer. Usually credits are within 7, 15,
o 30, 60, 90 or COD.
o Equity – investment
o Banks
o Term loans
o Leasing – method of acquiring business equipment without capital outlay.
o Commercial Bills
o Personal Instalment Loans
o Finance Companies
4. To what extent should an entrepreneur need to know and understand the
financial statements and their significance to his business?
- It is important to understand the information contained in your financial statements because
it can provide a health check on how the company is doing financially. Financial Statements
provide a snapshot of where money is generated and where it is spent.

B. Individual Financial Activity

1. Classified Balance Sheet commonly include the following categories:
a) Current Assets
b) Investments
c) Plant Assets
d) Intangible Assets
e) Current Liabilities
f) Long-Term Liabilities
g) Equity
 Indicate the typical classification of each item listed below by placing the letter
of the correct balance sheet category.
ANSWERS
C 1 Building
A 2 Office Supplies
C 3 Land Held for Future Plant Expansion
F 4 Long-term note payable
A 5 Accounts Receivables
Q 6 Retained Earnings
E 7 Accounts Playable
A 8 Merchandise Inventory
D 9 Patents
E 10 Wages Payable
A 11 Prepaid Expenses
A 12 Cash

2. Develop a Profit and Loss Statement using the following entries below:
• Income tax of 30%
• Depreciation Php 30,000
• Office Supplies Php 50,000
• Utilities Expense Php 45,000
• Sales Php 7,600,000
• COGS Php 2,200,000
• Furniture and Fixture Php 45,000
• Alaries and Wages Php 550,000
• Permits and Licenses Php 33,000
• Prepare the Report good for 5 Years