Before going over this module, the learner must answer the PRE-TEST in order for the teacher

to assess
Recognition of Prior Learning (RPL) and pin point specific topics that need emphasis during the discussion.

PRE-TEST

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.

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
Quarter 1 Module 1

Statement of Financial Position (SFP)

Learning Outcome(s):

At the end of the lesson, the learner is able 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

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.

ASSETS = LIABILITIES + OWNER’S EQUITY

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

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 P20,000 Accounts Payable P 5,000
Accounts Receivables 5,000
Supplies 11,000 Owner’s Capital 35,000
Equipment 4,000
Total Asserts P40,000 Total Liabilities & 40,000
Owner’s Equity
KEYPOINTS
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.

ACTIVITY

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
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

POST-TEST
I. Instruction: Solve for the accounting equation.
 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, Liabilities 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?

II. 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?
III. Prepare a SFP 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 totalled 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