FABM 2
Fundamentals of
Accountancy,
Business and
Management 2
Jellyn N. Narzo-
Edrosolo
SHS Math Teacher
Learning
Module 1
Statement of
Financial
Position
2
Describe the elements
of the statement of
Financial Position
Classify the elements of
the Statement of
Financial Position into
current and non-current
items
LEARNIN
Prepare the Statement
of Financial Position of a
G
single proprietorship
Prepare a Statement of OUTCOME
Financial Position using
the report form and the S
STATEMENT OF FINANCIAL
Also known as the POSITION
Balance this balance sheet
sheet helps users to assess
It presents the financial the financial and
position of an entity at a soundness of the
given date company or in a
The date of this statement is business. Analyze may
always “as at” or “as of” the assist identify the
end of the period relationship of the firm
This statement includes the in particularly
determining the
amounts of the company’s entities.
total assets, liabilities, and
owner’s equity which in
STATEMENT OF FINANCIAL
Also known as POSITION
the Balance sheet
It presents the financial position of an
entity at a given date
The date of this statement is always “as at”
or “as of” the end of the period
This statement includes the amounts of
the company’s total assets, liabilities, and
owner’s equity which in totality provides
the condition of the company on a specific
STATEMENT OF FINANCIAL POSITION
ASSE The assets finance
TS international
resources like
share capital and
COMPON LIABILIT profit, also external
ENTS IES credit like trade
creditors
EQUI
TY
STATEMENT OF FINANCIAL POSITION
ASSETS
COMPONEN LIABILITIE
TS
S
EQUIT
Y
STATEMENT OF FINANCIAL
POSITION
ACCOUNTING EQUATION
ASSET EQUIT
S = LIABILIT
IES + Y
This equation must always balance, reflecting that all
assets are financed either by borrowing (liabilities) or by the
owner’s capital (equity)
8 20XX
What does it mean?
ASSETS LIABILITIES EQUITY
What the business
Are obligations that
What the business
owns a business owes to owns
The resources someone.
The resources
controlled by the
Present obligations controlled by the
entity as result of arising from past entity as result of
past events and events past events and
resources with
Can be classified as resources with
future economic current or non- future economic
benefits are current liabilities benefits are
expected to follow expected to follow
to9 the entity Presentation title
to the entity 20XX
What does it mean?
ASSETS
What the business owns
The resources controlled by the entity
as result of past events and resources
with future economic benefits are
expected to follow to the entity
10
Can be classified as current or non-
Presentation title 20XX
Classification of Assets
are items listed on a company’s
balance sheet that are expected to be
converted into cash within one fiscal
CURRENT year.
Expected to be used /settled within a
year
are long –term assets that a company
expects to hold over one fiscal year
NON-CURRENT that cannot be readily converted to
cash within a year.
11 Presentation title 20XX
NORMAL OPERATING CYCLE
The normal operating cycle is the period it takes for an entity to
buy its inventories, sell them and collect the related receivables.
Examples of Current Assets
CASH
Includes bills and coins on hand, bank accounts, and operating
funds/working funds (e.g petty cash fund)
CASH EQUIVALENTS
Short-term, highly liquid investments that are readily convertible
to known amounts of cash and which are subject to an
insignificant risk changes of value.
TRADE ACCOUNTS RECEIVABLES
Amounts owed by customers to the entity. For goods bought or
for services received from the entity.
NOTES RECEIVABLES
Are evidenced by a promissory notes
Examples of Current Assets
INTEREST RECEIVABLES
Are collectible amounts due to the cost of borrowing money.
TRADING SECURITIES (Financial Assets/ PROFIT OF LOSS)
Securities that have been purchased by a company for the
purpose of realizing a short-term profit,
INVENTORIES
Merchandise held for resale
SUPPIES AND OTHER PREPAID ASSETS
This include office supplies to be consumed by the business and
prepaid assets.
Examples of Non-Current Assets
PROPERTY, PLANT AND EQUIPMENT
Include fixed assets used in the normal operating cycle or
production of the business.
INTANGIBLE ASSETS
Those assets meeting the definition of an assets but without
physical substance.
INVESTMENT PROPERTIES
Are lng-lived assets not used in production
BIOLOGICAL ASSETS
Are living plants or animals held by the business for resale or for
breeding
What does it mean?
LIABILITIES
Are obligations that a business
owes to someone.
Present obligations arising from past
events
Can be classified as current or non-
current liabilities
15 Presentation title 20XX
Classification of
Liabilities
Are those that the company expects
CURRENT to settle within 12 months of the date
on the balance sheet
are the ones the company reckons
NON-CURRENT and are not going anywhere soon.
16 Presentation title 20XX
Examples of Current Assets
ACCOUNTS PAYABLE
Are open accounts relating to purchase of goods and/or raw
materials
NOTES PAYABLE
Are evidenced by a promissory note
INTEREST PAYABLE
Interest are considered as cost for borrowing money
OTHER ACCRUED EXPENSES
These accounts pertain to expenses incurred but not yet paid.
(salaries, lands, utitlities)
INCOME TAX PAYABLE
Business organization’s tax liability to the government where it
operates.
Categories of Equity
FOR SOLE FOR PARTNERSHIP FOR
PROPRIETORSHIP CORPORATION
Owner’s Equity, net
Partners’ equity,
Stockholders’
of withdrawal net of partners; Equity
withdrawal and
share in net income
(net loss)
18 Presentation title 20XX
P OF SINGLE PROPIETORSH
STEPS IN PREPARING A
SIMPLE SFP
1. START 2. 3. 4. ADD
WITH THE PRESENT PRESENT THE
HEADING THE THE OWNER’S
ASSETS LIABILITIES EQUITY
P OF SINGLE PROPIETORSH
STEP 1: START WITH THE
HEADING
The includes the name of entity (individual or
company name), name of statement
(statement of financial position) and the
reporting period ( ex. As of December 31, 2021)
A. De Guzman
Statement of Financial Position
As of December 31, 2017
P OF SINGLE PROPIETORSH
STEP 2: PRESENT THE ASSETS
Classify the assets into current and non-current assets.
A. De Guzman
Statement of Financial Position
As of December 31, 2017
ASSETS
Current Assets
Cash 215, 000
Accounts 85, 000
Receivable 35, 000 335, 000
Prepaid Expenses
Non-current
Delivery equipment 450, 000
Accumulated (7, 500) 442, 000
Depreciation
TOTAL ASSETS Php 777, 8000
P OF SINGLE PROPIETORSH
STEP 3: PRESENT THE LIABILITIES
After presenting the total assets, next are the liabilities. Liabilities should also be
classified as current or non-current.
A. De Guzman
Statement of Financial Position
As of December 31, 2017
ASSETS
Current Assets
Cash 215, 000
Accounts Receivable 85, 000
Prepaid Expenses 35, 000 335, 000
Non-current
Delivery equipment 450, 000
Accumulated Depreciation (7, 500) 442, 000
TOTAL ASSETS Php 777, 8000
ACTIVI 1. Cash
TY 1
IDENTIFYING
2. Accounts Receivable
3. Accounts Payable
4. Retained earnings
COMPONENTS 5. Bank loan
6. Office equipment
7. Share capital
8. Inventory
INSTRUCTIONS: 9. Accrued expenses
Given the following 10.Property, plant, and equipment
list of items, classify
each as an Assets
(A), Liabilities (L), or
Equity (E)
ACTIVI
TY 2
Cash: Php 100, 000
Accounts Receivable: Php 50, 000
PREPARING A SIMPLE Inventory: Php 200, 000
STATEMENT OF Accounts Payable: Php 80, 000
FINANCIAL POSITION Short-term Loans: Php 70, 000
Long-term Loans: Php 150, 000
Equipment: Php 300, 000
INSTRUCTIONS: Retained Earnings: Php 150, 000
Using the following Share Capital: Php 200, 000
data, prepare a
Statement of
Financial Position for
XYZ Corporation as
of December 31, 24
STATEMENT OF FINANCIAL POSITION
ACTIVI
ASSETS:
*Cash: Php 120, 000
*Inventory: Php 250, 000
*Accounts Receivable: Php 90, 000
TY 3
*Property, Plant, and Equipment: Php 400, 000
LIABILITIES:
*Accounts Payable: Php 70, 000
ANALYZING A STATEMENT *Short-term Debt: Php 50, 000
*Long-term Debt: Php 300, 000
OF FINANCIAL POSITION EQUITY
*Share Capital: Php 300, 000
*Retained Earnings: Php 440, 000
Guided Questions:
1. What is the total value of the company’s assets?
INSTRUCTIONS: 2. How much does the company owe to external
Review the following creditors?
3. What is the total equity of the company?
Statement of 4. Calculate the company’s liquidity ratio using a
Financial Position formula: Current assets/Current Liabilities
5. Discuss the financial health of the company based
and answer the on the Statement of25Financial Position
Thank
you
