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1st Quarter Week 1 - Statement of Financial Position

The document discusses key financial statements including the statement of financial position (balance sheet), statement of income, and statement of cash flows. It provides details on the components and format of the statement of financial position, including that it contains asset, liability, and owner's equity sections and follows the accounting equation of assets = liabilities + owner's equity. An example statement of financial position is also included for Angel Service Company.

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Juvilyn Cariaga Felipe
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87 views13 pages

1st Quarter Week 1 - Statement of Financial Position

The document discusses key financial statements including the statement of financial position (balance sheet), statement of income, and statement of cash flows. It provides details on the components and format of the statement of financial position, including that it contains asset, liability, and owner's equity sections and follows the accounting equation of assets = liabilities + owner's equity. An example statement of financial position is also included for Angel Service Company.

Uploaded by

Juvilyn Cariaga Felipe
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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FUNDAMENTALS OF

ACCOUNTANCY, BUSINESS AND


MANAGEMENT 2
FINANCIAL STATEMENTS

• Statement of Financial Position (SFP)


• Statement of Income
• Statement of Cash Flows
Statement of Financial Position

• Also called Balance Sheet


• Reports the permanent accounts as of the end of accounting
period
Contents of Statement of Financial Position

• Assets
• Liabilities
• Owner’s Equity
The SFP or Balance Sheet contains the
following:

A. Heading
1. Name of the Business
2. Title of the Report
3. Date of the Report (Specific date)
4. Currency
B. The Asset Section
C. The Liability Section
D. The Owner’s Equity Section
Components of the Accounting Equation

•ALOE
Accounting Equation

Assets = Liabilities + OE
or
Assets – Liabilities = OE
Rules of Debits and Credits

Normal Balances

Assets Debit Balance

Liabilities Credit Balance

Owner’s Equity Credit Balance

Revenue or Income Credit Balance

Cost and Expenses Debit Balance


Classification of Balance Sheet Accounts

• Current assets
• Non-current Assets
• Current Liabilities
• Non-current Liabilities
• Owner’s Equity
Two form of Financial Position

1. Report Form (Vertical Form)

Assets
Total Assets Pxxx
Liabilities Pxxx
Owner’s Equity Pxxx
Total Liabilities
And Owner’s Equity Pxxx
2. Account Form (Horizontal Form)

Assets Liabilities
Owner’s Equity

Total Liabilities
Total Assets Pxxx and Owner’s Equity Pxxx
Angel Service Company
Statement of Finacial Position
December 31, 2001

Assets
Current Assets
Cash on Hand and in Banks P 52,000
Accounts Receivable (net of P15,000 allowance for bad debts) 590,000

Notes Receivable 100,000


Unused Supplies 38,000
Prepaid Expenses 43,000
Total Current Assets 823,000

Noncurrent Assets
Equipment 2,800,000
Less: Accumulated Depreciation 150,000
Net Equipment 2,650,000
Total Assets P 3,463,000

Liabilities and Owner's Equity


Current Liabilities
Accounts Payable-Trade P 850,000
Accounts Payable-Others 330,000
Taxes/SSS/Philhealth/EC/HDMF Payable 20,000
Total Current Liabilities 1,200,000

Noncurrent Liabilities
Loans Payable 138,000
Total Liabilities 1,338,000

Owner's Equity
Angel Reyes, Capital 2,135,000
Total Liabilities and Owner's Equity P3,473,000
Angel Service Company
Statement of Finacial Position
December 31, 2001

Assets Liabilities and Owner's Equity

Current Assets Current Liabilities


Cash on Hand and in Banks P 52,000 Accounts Payable-Trade P 850,000
Accounts Receivable (net of P15,000 590,000 Accounts Payable-Others 330,000
allowance for bad debts) Taxes/SSS/Philhealth/EC/HDMF Payable 20,000
Notes Receivable 100,000 Total Current Liabilities 1,200,000
Unused Supplies 38,000
Prepaid Expenses 43,000
Total Current Assets 823,000 Noncurrent Liabilities
Loans Payable 138,000
Total Liabilities 1,338,000
Noncurrent Assets
Equipment 2,800,000
Less: Accumulated Depreciation 150,000 Owner's Equity
Net Equipment 2,650,000 Angel Reyes, Capital 2,135,000
Total Assets P 3,463,000 Total Liabilities and Owner's Equity P3,473,000

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