Statement of Financial Position

-balance sheet

-amounts of the company’s total assets, liabilities, and owner’s equity

EXAMPLE

▪ Cash

▪ Accounts

Receivable

▪ Accounts Payable

▪ Loans Payable

▪ Capital

ASSETS these are properties or things of value

such as cash, equipment, inventories

CONTRA ASSETS are those accounts

that are presented under the assets

portion of the SFP

CURRENT ASSETS - Assets that cannot be

realized in one year

Ex: Cash, Accounts Receivable,

Merchandise Inventory, Prepaid Expense,

NON-CURRENT ASSETS - Assets that

cannot be realized in one year

Ex: Property, Plant and Equipment

(equipment, furniture, building, land)

OWNER’S EQUITY - the residual

interest in the assets after deducting all its

liabilities.

Report Form

•patayo

Account form

•pahiga

Parts:

Name of the company

Name of the statement

Year ended

•Current assets

List lahat ng current asset

•total current assets

•non current assets

List lahat ng non current asset

•total asset

Iadd lang lahat

•current liabilities

Ilist lahat ng current liabilities

•total current liabilities

•non current liabilities

Ilist lahat ng non current liabilities

•total liabilities

•owners equity

•total liabilities and owner's equity(kailangan ang total neto ayy pantay sa total ng current asset)

__________________________________________

Statement of Comprehensive Income

STATEMENT OF COMPREHENSIVE INCOME

-also known as the income statement

-contains the results of the company’s operations for a specific period of time

Net income

-if it is a net positive result

Net loss

-if it is a net negative result

ELEMENTS OF INCOME STATEMENT

•income

•expenses

Income encompasses both revenue and gain

Expenses encompasses both expenses and losses

TEMPORARY ACCOUNTS

Also known as nominal accounts

are the accounts found under the

SCI.

EXAMPLES OF TEMPORARY

ACCOUNTS

❑ Revenues

❑ sales

❑ utilities expense

❑ supplies expense

❑ salaries expense

❑ depreciation expense

A service type of business provides

intangible products (products with no

physical form). Service type firms offer

professional skills, expertise, advice,

and other similar products.

Examples of service businesses are:

salons, repair shops, schools, banks,

accounting firms, and law firms.

A merchandising type of business is a

type of business that buys goods and

resells them, generally for the higher

price than they were purchased.

Examples of merchandising business are:

clothing stores, grocery stores, drugstores,

and bookstores.

__________________________________________

Statement of Changes in Equity

-All changes, whether increases or decreases to

the owner’s interest in the company during the

period are reported.

Examples:

Additional investment

Net income

Withdrawals

Forms of Business

1. Single/Sole Proprietorship

- An entity whose assets, liabilities, income, and

expenses are owned by only one person.

2. Partnership - An entity whose assets, liabilities,

income, and expenses are owned by two or more

persons.

3. Corporation

- An entity whose assets, liability, income, and

expenses are owned by itself being legally

separate entity from its owner. Owners are called

stockholders of the company

FACTORS AFFECTING THE

STATEMENT OF CHANGES IN EQUITY

1. Initial Investment - is the very first investment

of the owner to the company.

2. Additional Investment - increase to owner’s

equity by adding investments by the owner.

3. Withdrawals - decrease to owner’s equity by

withdrawing assets by the owner.

______________________________________

Statement if Cash Flow

-It provides an analysis of inflows and/or outflows of cash from/to operating, investing and

financing activities

Operating Activities

-Activities that are directly related to the main revenue-producing activities of the

company such as cash from customers and cash paid to suppliers/employee abilities.

Examples of Operating Activities:

Cash Inflow

⮚ Cash receipts from sales of goods and rendering of services (+)

⮚ Cash receipts from royalties, fees, commission and other revenue (+)

⮚ Interest received (+)

⮚ Dividends received (+)

Cash Outflow

⮚ Cash payments to suppliers of goods and services (-)

⮚ Cash payments to employees (-)

⮚ Cash payments to employees (-)

⮚ Interest paid (-)

Investing Activities

-Investing cash flows typically include the

cash flows associated with buying or selling property, plant, and equipment, other non-current assets, and other financial assets.

Examples of Investing Activities

Cash Inflow

⮚ Cash receipts from sale of property, plant and equipment (+)

⮚ Cash receipts from sale of intangible assets (+)

⮚ Cash receipts from sale of other long-term assets (+)

Cash Outflow

⮚ Cash payments to acquire property, plant and equipment (-)

⮚ Cash payment to acquire intangible assets (-)

Financing Activities

- Financing cash flows typically include cash flows associated with borrowing and repaying bank loans, and issuing and buying back shares.

-Cash transactions related to changes in equity and borrowing

Examples of Financing Activities

Cash Inflow

⮚ Cash investments from owners (+)

⮚ Cash proceeds from bank loans (+)

Cash Outflow

⮚ Cash distributions to owners (-)

Repayment of bank loans (-)

Methods of Presentation of Operating Cash Flow

⮚ Direct – The operating cash flow section of the CFS under the direct method would Show each major class of gross cash receipts and gross cash payments

Indirect – The operating cash flow section of the CFS under the indirect method will

reconcile the net income/loss of the company with the total cash flows

generated/used in operating activities by adjusting the net income/loss for effects of

non-cash transactions.