preparing SFP PPT

1. ABM 12

2. Prepare an SFP using the report form and
the account form with proper
classification of items as current and
noncurrent A
OBJECTIVE: A

3. Report form – A form of the SFP that shows
asset accounts first and then liabilities and
owner’s equity accounts after. (Haddock,
price, & farina, 2012)the balance sheet shown
earlier is in report form.
DIFFERENTIATE THE REPORT FORM
AND ACCOUNT FORM

5. Account Form – A form of the SFP that shows assets on
the left side and liabilities and owner’s equity on the
right side just like the debit and credit balances of an
account. (Haddock, Price, & Farina, 2012) a. Emphasize
that the two are only formats and will yield the same
amount of total assets, liabilities and equity b.
Emphasize that assets should always be equal to
liabilities and equity .

7. HEADING
CURRENT
ASSET
NONCURRENT
ASSET

8. CURRENT
LIABILITIES
NON CURRENT
LIABILITIES
OWNER’S EQUITY

9. Group accounts under
current assets, noncurrent
assets, current liabilities,
noncurrent liabilities and
owner’s equity

10. Current Assets – Assets that can be realized (collected, sold, used up) one year
after year-end date. Examples include Cash, Accounts Receivable, Merchandise
Inventory, Prepaid Expense, etc.
Current Liabilities – Liabilities that fall due (paid, recognized as revenue) within
one year after yearend date. Examples include Notes Payable, Accounts Payable,
Accrued Expenses (example: Utilities Payable), Unearned Income, etc. Current
Assets are arranged based on which asset can be realized first (liquidity).
Current assets and current liabilities are also called short term assets and shot
term liabilities.
Noncurrent Assets – Assets that cannot be realized (collected, sold, used up) one
year after yearend date. Examples include Property, Plant and Equipment
(equipment, furniture, building, land), Long Term investments,Intangible Assets
etc.
Noncurrent Liabilities – Liabilities that do not fall due (paid, recognized as
revenue) within one year after year-end date. Examples include Loans Payable,
Mortgage Payable, etc. Noncurrent assets and noncurrent liabilities are also
called long term assets and long term liabilities.