Name: _____________________________________Date: ________________

Grade: ____________________________________ Section: _____________

Fundamentals of Accountancy, Business, and

Management 2

Most Essential Learning Competency: (MELC)

Prepares a CFS.ABM_FABM12-lf-11

Demonstrates an understanding of the components and the structure of a CFS that will equip
him/her in the preparation of the said financial report.

What I Need to Do
This worksheet is created for you to be able to understand the lesson well .
It is crafted to help you prepare a CFS.

Example of Cash Flow

J & M Online Shop
Statement of Cash flows
For the Period Ended December 31, 2019

CASH FLOW FROM OPERATING ACTIVITIES

Cash receipts from rendering of services P100,000

Cash payments to suppliers of goods & services (50,000)
Net cash low from operating activities P 50,000

CASH FLOW FROM INVESTING ACTIVITIES

Purchase of property, plant, and equipment P100,000

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CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from cash investment of owners P230,000

Proceeds from bank loans 50,000
Payment to owners (10,000)
Net cash flow from financing activities 270,000
NET INCREASE IN CASH 420,000
CASH AT THE BEGINNING OF THE PERIOD 250,000
CASH AT THE END OF THE PERIOD 670,000

Gearing Up
This worksheet is created for you to be able to understand the lesson well. It
was crafted based on your level of understanding. You will be questions. Then, prepare
CFS.
Just follow the directions while exploring the activities. Rest assured the lesson
would be easier for you.

Getting Better

Multiple Choice: Write the letter of the best answer.

______1. Which of the following events increases cash balance?
a. Bank not granting loan
b. Debtors paying to the company
c. Loan repayment of creditors
d. Sale of stock on account
______2. Which of the following events reduce cash balance?
a. Purchase of fixed assets
b. Acquired assets on credit
c. Purchase of stock on account
d. Creditors grant loans
e.
______3.Which of the following is false?
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 a. A profitable business will never run out of cash
b. Companies undergoing expansion can sometimes face a cah shortage
c. In case cash outflows exceed cash inflows on an going basis, the business
will eventually run out of cash
d. Cash is the lifeblood of a business and without if the business will eventually
die.
_______4.What is the effect of paying loan principal on cash flow and profits?
a. On profit-Decrease, On cash-Decrease
b. On profit-Decrease, On Cash – None
c. On profit-Decrease, On Cash-Decrease
d. On profit-None, On Cash-Decrease
_______5.Which one of the following is not a category of cash flows required to be
shown on the statement of cash flows?
a. Cash flows from operating activities
b. Cash flows from financing activities
c. Cash flows from taxation
d. Cash flows from investing activities
_______6.Which of the following is categorized as a cash flow from investing activities?
a. Increase in inventory
b. Proceeds of a loan
c. Proceeds from sale of PPE
d. Dividends paid
_______7.Which of the following would reduce the cash balances of a business and not
reduce the profit?
a. Distribution costs
b. Dividend paid
c. Interest paid
d. Wages paid
_______8.Which of the following reduces the cash balances of a business?
a. Cash inflow from interest income
b. Cash inflow from dividend income
c. Cash outflow to acquire fixed assets
d. All of the above
_______9.Which of the following is a cash flow from a “financing” activity?
a. Cash payments to acquire intangible assets
b. Cash receipts from sale of tangible assets
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 c. Cash proceeds from bank loans
d. Cash payments to acquire PPE
_______10.Which of the following is not a cash outflow for the business?
a. Depreciation
b. Dividends
c. Interest payments
d. Taxes

Gaining Mastery

Rey Aragon established a merchandising business. The following data are taken from
the records of the accounting department for the year 2019.

Collection from customers P315,800

Rent Income 30,000
Dividends Income 12,000
Interest Income 9,000
Payments for operating expenses (145,000)
Payments for Interest expense (6,000)
Proceeds from sale of equipment 15,000
Proceeds from sale furniture 8,000
Payment for purchase of furniture (31,000)
Additional investment of owner 22,200
Proceeds of bank loan 200,000
Cash withdrawals of owner (30,000)
Payment of bank loan (150,000)
Cash balance-January 1 200,000

Required: Prepare a statement of cash flows then determine the following:

1. Net cash flow from operating activities
2. Net cash flow from investing activities
3. Net cash flow from financing activities
4. Net increase/decrease in cash
5. Cash balance end December 31, 2019

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 What I Need to Remember

Statement of Cash Flow can be easily to prepare by remembering the three

compositions which are cash flow from operating activities, cash flow from investing
activities, and cash from financing activities.

Writer : ZACARIAS A. PHALA, JR.

School : NIEVES VILLARICA NATIONAL HIGH SCHOOL
Division : ISLAND GARDEN CITY OF SAMAL

Illustrator: ZACARIAS A. PHALA, JR.

School : NIEVES VILLARICA NATIONAL HIGH SCHOOL
Division : ISLAND GARDEN CITY OF SAMAL

Content : JHINETE R. ESTOY

School : ANONANG NATIONAL HIGH SCHOOL
Division : ISLAND GARDEN CITY OF SAMAL

Language :ELLEN EVE C. MARIKIT

School :MAMBAGO - B NATIONAL HIGH SCHOOL
Division : ISLAND GARDEN CITY OF SAMAL

References: Department of Education , Curriculum Strand Senior High School

Most Essential Learning Competencies, pp 586 to 588
Fundamentals of Accountancy, Business, and Management 2 by Flocer Lao Ong
& Janelle Gomendoza

Answer Key

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 A. Getting Better is dependent to the preparation of the Statement of Cash Flow
that will be provided by the teacher.
B. For Gaining Mastery

Multiple Choice: Write the letter of the best answer.

B.1. Which of the following events increases cash balance?
a. Bank not granting loan
b. Debtors paying to the company
c. Loan repayment of creditors
d. Sale of stock on account
A 2. Which of the following events reduce cash balance?
a. Purchase of fixed assets
b. Acquired assets on credit
c. Purchase of stock on account
d. Creditors grant loans
A. 3.Which of the following is false?
a. A profitable business will never run out of cash
b. Companies undergoing expansion can sometimes face a cash shortage
c. In case cash outflows exceed cash inflows on an going basis, the
business will eventually run out of cash
d. Cash is the lifeblood of a business and without if the business will
eventually die.
D. 4.What is the effect of paying loan principal on cash flow and profits?
a. On profit-Decrease, On cash-Decrease
b. On profit-Decrease, On Cash – None
c. On profit-Decrease, On Cash-Decrease
d. On profit-None, On Cash-Decrease
C.5.Which one of the following is not a category of cash flows required to be
shown on the statement of cash flows?
a. Cash flows from operating activities
b. Cash flows from financing activities
c. Cash flows from taxation
d. Cash flows from investing activities
C 6.Which of the following is categorized as a cash flow from investing
activities?
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 a. Increase in inventory
b. Proceeds of a loan
c. Proceeds from sale of PPE
d. Dividends paid
B 7.Which of the following would reduce the cash balances of a business and not
reduce the profit?
a. Distribution costs
b. Dividend paid
c. Interest paid
d. Wages paid
C 8.Which of the following reduces the cash balances of a business?
a. Cash inflow from interest income
b. Cash inflow from dividend income
c. Cash outflow to acquire fixed assets
d. All of the above
C 9.Which of the following is a cash flow from a “financing” activity?
a. Cash payments to acquire intangible assets
b. Cash receipts from sale of tangible assets
c. Cash proceeds from bank loans
d. Cash payments to acquire PPE
A 10.Which of the following is not a cash outflow for the business?
a. Depreciation
b. Dividends
c. Interest payments
d. Taxes
Rey Aragon Merchandising
Statement of Cash Flows
For Year Ended December 31, 2019

Cash flow from Operating Activities:

Receipts
Collection from customers P315,800
Rent Income 30,000
Dividends Income 12,000
Interest Income 9,000
Payments
Payments for operating expenses (145,000)
Payments for Interest expense (6,000)
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Net Cash from Operating Activities P215,800
Cash Flows from Investing Activities:
Receipts
Proceeds from sale of equipment P 15,000
Proceeds from sale furniture 8,000
Payments
For purchase of furniture (31,000) (8,000)
Net Cash from Investing Activities 207,000
Cash Flows from Financing Activities:
Receipts
Additional investment of owner P 22,200
Proceeds of bank loan 200,000
Payments
Cash withdrawals of owner (30,000)
Payment of bank loan (150,000)
Net Cash from Financing Activities 42,200
Net Increase/Decrease in Cash P250,000
Cash balance-January 1 200,000
Cash balance-December 31 P450,000

Writer : ZACARIAS A. PHALA, JR

School : NIEVES VILLARICA NATIONAL HIGH SCHOOL
Division : ISLAND GARDEN CITY OF SAMAL

Illustrator: ZACARIAS A. PHALA, JR.

School : NIEVES VILLARICA NATIONAL HIGH SCHOOL
Division : ISLAND GARDEN CITY OF SAMAL

Content : JHINETE R. ESTOY

School : ANONANG NATIONAL HIGH SCHOOL
Division : ISLAND GARDEN CITY OF SAMAL

Language :ELLEN EVE C. MARIKIT

School :MAMBAGO - B NATIONAL HIGH SCHOOL
Division :ISLAND GARDEN CITY OF SAMAL
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