Cerilla, Cinderella Joy I.

BSTM2M1
ACCOUNTING (SUN 1-4 PM)

Answer the seatwork using Microsoft word and then convert into a PDF file.

ESSAY:

1. What is an adjusting entry?

 Its purpose is for income and expenses to be reported in the correct period. It is also the
entries that bring the accounts up to date. It ensures that both the revenue recognition and
matching principles are followed.

2. What are the different basic sources of adjusting entries? Enumerate and explain.

 The five basic sources of adjusting entries are: Depreciation Expense, Prepaid Expense,
Unearned Income, Accrued Expense, and Accrued Income.

3. What is a Financial Statement and its parts?

 Financial statements are a collection of summary-level reports about an organization's

financial results, financial position, and cash flows. They include the income statement,
balance sheet, and statement of cash flows. They are (1) balance sheets; (2) income
statements; (3) cash flow statements; and (4) statements of shareholders' equity.

4. What is a Statement of Financial Position? Provide an example format of a Statement of Financial

Position.

 The statement of financial position is another term for the balance sheet. The statement
lists the assets, liabilities, and equity of an organization as of the report date. As such, it
provides a snapshot of the financial condition of a business as of a specific date. It is one
of the financial statements, and so is commonly presented alongside the income
statement and statement of cash flows. The format of the statement of financial position
follows the basic accounting equation , which states that:

 Assets = Liabilities + Equity

 This means that all asset line items are presented first, with a total that matches the
totals for liabilities and equity, which are presented next.
5. What is a Statement of Comprehensive Income? Provide an example format of a Statement
of Comprehensive Income.

 The statement of comprehensive income is

a financial statement that summarizes both
standard net income and other comprehensive
income (OCI). The net income is the result obtained
by preparing an income statement. Whereas, other
comprehensive income consists of all unrealized
gains and losses on assets that are not reflected in
the income statement.  It is a more robust document
that often is used by large corporations with
investments in multiple countries.

6. What is a Statement of Cash Flow? Provide an example format of a Statement of Cash Flow.

 A cash flow statement is a financial statement that

provides aggregate data regarding all cash inflows
that a company receives from its ongoing operations
and external investment sources. It also includes all
cash outflows that pay for business activities and
investments during a given period.

7. What is a Statement of Changes in Equity? Provide an example format of a Statement of Changes

in Equity.

 A statement of change in equity (also referred to as statement of retained earnings) is a

business' financial statement that measures the changes in owners' equity throughout a
specific accounting period.

8. What is Notes to Financial Statement? Provide an example format of a  Notes to Financial

Statement.