BALANCE SHEET

Group 1:

Floralde, Frederick
Pacurib, Jastine Breathe A.
BASIC CONCEPTS
 Money Measurement Concept – accounting records only those facts that can
be expressed in monetary terms.
 Entity Concept – accounts are kept for entities as distinguished from the persons
associated with those entities.
 Going Concern Concept – accounting assumes that an entity will continue to
exist indefinitely
 Cost Concept – Nonmonetary and monetary assets are ordinarily entered in the
accounts at the amount paid to acquire them.
 Dual Aspect – every transaction affects at least two items and preserves the
fundamental equation: Assets = Liabilities + Owners’ Equity
BALANCE SHEET

• Known also as “Statement of Financial Position”

• It shows the financial condition of an entity as of a
specified moment in time.
THE BASIC ACCOUNTING EQUATION

ASSETS = EQUITIES

ASSETS = LIABILITIES + OWNERS’ EQUITY

Economic resources Obligations of the Amount the owners have

controlled by the entity invested in the entity
entity
ASSETS
Current Assets Non-Current Assets
• Cash • Property, Plant and Equipment
• Marketable Securities • Long-term Investments
• Accounts Receivable • Intangible Assets
• Inventories
• Prepaid Expenses
LIABILITIES
Current Liabilities Non-Current Liabilities
• Accounts Payable • Loans Payable
• Notes Payable • Mortgage Payable
• Short-term Loans • Bonds Payable
• Taxes Payable
• Accrued Expenses
• Current Portion of Long-term
Debt
OWNERS’ EQUITY
PROPRIETORSHIP PARTNERSHIP CORPORATION

Owner, Capital Partner 1, Capital Capital Stock

Partner II, Capital Additional Paid-in Capital

Partner III, Capital Retained Earnings

 CASE STUDY: LONE PINE CAFÉ (A)
Questions:

1. Prepare a balance sheet for the Lone Pine Café as of November 2, 2009.
2. Prepare a balance sheet as of March 30, 2010.
3. Disregarding the marital complications, do you suppose that the
partners would have been able to receive their proportional share of the
equity determined in Question 2 if the partnership was dissolved on
March 30, 2010? Why?