2. GRADE 12
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Learning Module for Senior High School Accountancy , Business and Management
Fundamentals of Accountancy, Business and Management 2 – Grade 12
Alternative Delivery Mode
Quarter 1 – Module 1: Statement of Financial Position
First Edition, 2020
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The publisher and authors do not represent nor claim ownership over them.
Published by the Department of Education
Secretary: Leonor Magtolis Briones
Undersecretary: Diosdado M. San Antonio
Development Team of the Module
Writers: Ma. Cristina A. Labay, MM Manuel L. Hermosa, EdD
Isabel A. Gumaru, DBA Farida F. Tallud, DBM
Ellaine I. Dela Cruz, DBA Clarabelle V. Dalimit, DEM
Mark Vincent B. Emit, PhD Jupiter Q. Whiteside,MBA
Mamerto T. Goneda, MSIT Edna B. Waje, DEM
Validators: Remylinda T. Soriano, EPS, Math
Angelita Z. Modesto, PSDS
George B. Borromeo, PSDS
Illustrator: Writers
Layout Artist: Writers
Management Team : Malcolm S. Garma, Regional Director Name of Regional Director
Genia V. Santos, CLMD Chief Name of CLMD Chief
Dennis M. Mendoza, Regional EPS in Charge of LRMS
and Regional ADM Coordinator
Maria Magdalena M. Lim, CESO V, Schools Division
Superintendent Aida H. Rondilla, CID Chief
Lucky S. Carpio, EPS in Charge of LRMS and
Division ADM Coordinator
Printed in the Philippines by ________________________
Department of Education – National Capital Region
Office Address: ____________________________________________
____________________________________________
Telefax: ____________________________________________
E-mail Address: ____________________________________________
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The following are some reminders in using this module:
1. Use the module with care. Do not put unnecessary mark/s on any part of the
module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities included
in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not hesitate to consult
your teacher or facilitator. Always bear in mind that you are not alone.
We hope that through this material, you will experience meaningful learning and gain deep
understanding of the relevant competencies. You can do it!
What I Need to Know
This module was written for you to accomplish at home. It was carefully
designed so that you can work at your own pace and allow self-discovery of the
concept through activities that you will perform. Activities were also selected to allow
independent learning which also aims to develop students’ reading comprehension
skills through understanding written texts.
After going through this module, you are expected 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
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What I Know
As a prerequisite to FABM2 is FABM1. You must recall through your stock
knowledge the Elements of Financial Statements. The basic purpose of accounting
is to provide information that is useful for making economic decision Accounting
information is most commonly communicated to users of accounting information
through the financial statements.
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.
Please check your answer.
1. Journal 6. Income
2.Accounting equating 7. Expenses
3.Financial 8. Journalizing
Statement 9. Ledger
4.Assets 10. Posting to
5.Liabilities ledger
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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
All are true
except no. 2 and
no.4. Explanation
is at the right
The answer for no. 2 is false because
permanent account is real account. Like
assets, liabilities and owner’s equity
account
The answer for no. 4 is false because the
elements of Statement of financial position
are Assets, Liabilities and Owner’s Equity
account
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STATEMENT OF
MODULE 1 FINANCIAL POSITION
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.
What’s In
I want you to identify all the Assets, Liabilities and Owner’s Equity of your
family. You can ask your family members to help you identify the elements of the
financial position.
Independent Activity 1.1: My Family’s Financial Posit (Critical - Thinking,
Creativity, Character and Collaboration)
Instructions: Cut out pictures from magazines or you can take a picture or draw all
your family’s assets, I want you to identify all the liabilities, and the owner’s equity
account. Make a reflection of what your family need to do in order to make the
Financial Position more attractive.
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LIABILITIES
EQUALS
+
ASSETS
OWNER’S EQUITY
Notes to the Teacher
Students can borrow books from their neighbor about the accounting or can
browse the notes in FABM1 for understanding the topics of “Statement of
Financial Position” repetition of the words and it use will make the students
remember and retain those account titles in their mind as stock knowledge.
Note: For learners who are using online platform
The learning module emphasizes on the 5-C skills being developed by the
learnersthrough the activities – (Communication, Collaboration, Creativity,
Critical thinking and Character Building).
What’s New
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
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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 P10,000 Accounts Payable P 5,000
Accounts Receivables 5,000
Supplies 1,000 Owner’s Capital 35,000
Equipment 4,000
Total Asserts P40,000 Total Liabilities & 40,000
Owner’s Equity
The format given above is the Account form. All assets are found on the
left side of the account and the liabilities and owner’s equity account
are found on the right side of then account
The table below shows the Report form format for the statement of
financial position. Assets, liabilities and owner’s equity accounts are in
one direction. You must place the assets first, then the total liabilities and
owner’s equity account. This is usually the format that will be submitted to
the government and private agencies such as Banks. Financial
institutions, Bureau of Internal Revenue, City Treasurer’s office and others.
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HEADING
CURRENTASSETS
NON-CURRENT
ASSETS
CURRENT LIABILITIES
LONG TERM
LIABILITIES
OWNER’S EQUITY
What’s More
Independent Activity 1.1 (Critical Thinking and Communication)
This time, I want you class to do the following task alone. Make sure to answer them
correctly.
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
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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
Note: If you failed to scoreat least
four (4) out of five (5), please
answer activity 1.2
Activity 1.2 (Critical Thinking)
Instructions: Choose the correct answer by writing the correct letter/s
of your choice
1`. The elements of the financial statements include
1. Assets 4. Income
2. Liabilities 5. expenses
3. Equity
a. 1, 2 and 3 c. 1, 2 and 3
b. 1, 2, 3, 4 and 5 d. 1, 4 and 5
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2. Information of the financial performance is provided by
a. Statement of profit and loss
b. Statement of changes in
owners c. Statement of financial
position a. Cash flow statement
3. The following are terms used synonymously with equity except
a. Capital c. Net worth
b. Net Assets d. Revenue
4. The following are examples of current Assets except
a. Cash b. Accounts c. Prepaid Expenses
b. Accounts Receivables d. Unearned Income
5. These are easily convertible into cash within the normal operating cycle of
the business
a. Current liabilities
b. Current Assets
c. Equity
d. non -current assets
IndependentActivity 2.1:
Instruction: Solve for the accounting
equation.
Rememberthe Accounting Equation?
Assets is equals to Liability and Owner’s Equity Account
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, Owner’s equity 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?
Look at the answer key provided on page 16. You must answer the next activity if
you didn’t get at least 4 out of 5 from the above activity.
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IndependentActivity 2.2 (Critical Thinking)
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?
What I Have Learned
Statement of Financial position is one of the Financial reports submitted
by the company to the users of information such as banks and other financial
institutions. They are called permanent because of their existence is continuous
and the balance is forwarded to the next accounting period. The elements of
financial position are assets, liabilities and owner’s equity account. The kinds
of Assets are Current and Non-Current while the kinds of liabilities are Current
and Long-Term Liabilities. Under current assets are cash, receivables,
Inventories and prepaid expenses. Non-current assets include Land, Building
Equipment and furniture and their accumulated depreciation. While for Current
Liabilities includes Accounts Payables and Notes Payable and for the Long-Term
Liabilities
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♥♥♥What I Need to Reflect (Character)
You must buy only the important and the basic needs of the family or buy
assets that has economic benefit in the future, when you don’t have cash do
not borrow money just to acquire it. However, if you have more than enough
for your family, why not think of donating something for the less fortunate
specifically this pandemic situation.
What I can Do
Practice makes perfect! I want you to review all our lessons
learned you can check your FABM1 notes. You can prepare an SFP using
all the assets, liabilities and equity of your family. (Collaboration and
Critical Thinking)
Assessment
Instructions: Compute for the missing amount of the account titles taken from the SPF
of independent company Critical Thinking and Communication)
_______1. Assets are Php 27,000 and owner's equity is Php15,000, liabilities?
_______2. At the end of the first month of operations for TMAM Transportation, the
business had the following accounts: Accounts Receivable, Php2,800;
Prepaid Insurance, Php700; Equipment, Php85,500 and Cash, Php75,550.
On the same date, TMAM owed the following creditors: Mely’s Supply
Company, Php8,000; Mark’s Equipment, Php19,500. The current assets
for the Juana’s Delivery Service are
_______3. At the end of the first month of operations for Mary Anne’s, the business
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had the following accounts: Accounts Receivable, Php4,800; Prepaid
Insurance, Php15,000; Equipment, Php68,200 and Cash, Php40,650.
On the same date, Juana owed the following creditors: Bonny Supply
Company, Php42,000 (due in 6 months); Maria’s Equipment, Php90,500
(due after 2 years). Current liability is
_______4. If during the year total assets increase by Php85,000 and total liabilities
decrease by Php15,000, by how much did owner's
equity increase/decrease?
------------5.Using the following accounts Cash – 15,000 Loans Payable – 77,500
Accounts Receivable – 6,300, Inventory- 7,400 Supplies – 4,200Equipment
– 52,000 Owner’s equity – 98,000 Accounts Payable – 22,400 Building –
113,000,
How much is the total assets and Total Liabilities and Owner’s Equity?
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.
Teaching Guide in Senior High School Fundamentals of Accountancy Business
and Management 2, donated by the Commission on Higher Education in
Collaboration with the Philippine Normal University to Department of Education
Websites
accounting coach.com
https://www.moneymanagement.org/blog/financial-proverbs-that-are-still-true-today
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Additional Activities
Prepare a SPF 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 totaled 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
Answer Key
Activity Activity Activity 2.1 Activity 2.1 Assessment
1.1 1.2
1. d 1. a 1. 125,000 1. 185,000 = 1. 12,000
2. c 2. a (200,000-75,000) (150,000 2. 79,000
3. b 3. b 2. 5,000 (15,000 – +35,000) 3. 42,000
4. d 4. d 10,000) 2. 640,00.00 4. 100,000
5. b 5. d 3. 100,000 3. 125,000 5. 197,900
(350,000-250,000) (825,00 –
4. 80,000 (30,000 700,000)
+50,000) 4. 240,000
5. 150,000 [75,000 –
(200,000- 50,000) (165,000 +
350,000)
5. 550,000.00
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Other Activity
HEADING
Current Assets P167,000
Non-Current 100,000
Total Assets P267,000
Current Liabilities P8,000
Non-Current 50,000
Total Liabilities 58,000
Equity P 209,000
Total Liabilities & Owners Equity P267,000
Answer Key WorksheetActivity 1
1 Permanent 11 Temporary
2 Permanent 12 Permanent
3 Permanent 13 Permanent
4 Permanent 14 Permanent
5 Temporary 15 Permanent
6 Permanent 16 Temporary
7 Permanent 17 Temporary
8 Permanent 18 Permanent
9 Permanent 19 Permanent
10 Temporary 20 Permanent
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Name: ____________Grade Level: ______Section: _____Score: _________
Teacher: ____________________School: ______________________________
Objective: To be able to identify the permanent accounts in the Chart of
accounts given
Learning Content: Account titles under assets, liabilities and capital account
of the Statement of Financial Position.
WorksheetActivity 1
Write P if the account title is permanent account and T if the account
title is temporary. Use another sheet of paper for your answer.
1 Assets 11 Utilities Expense
2 Liabilities 12 Cash
3 Owner's Equity 13 Building
4 Capital 14 Furniture
5 Revenues 15 Notes Payable
6 Accounts Receivables 16 Owner's Drawing
7 Accounts Payable 17 Supplies Expense
8 Prepaid Rent 18 Supplies
9 Unearned Rent 19 Notes Receivables
10 Rent Expense 20 Notes Payable
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