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Fundamentals of Accountancy, Business and Management 2 – Grade 12
Alternative Delivery Mode
Quarter 1 – Module 1: Statement of Financial Position (SFP)
First Edition, 2020
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Published by the Department of Education, Division of Palawan

Schools Division Superintendent:
Natividad P. Bayubay, CESO VI
Assistant Schools Division Superintendents:
Loida P. Olavario, Ph.D.
Felix M. Pamaran
Development Team of the Module

Writers: Daisy S. Dela Peña
Content Editors: Edheson M. Gapad
Mark G. Javillonar
Language Editor: Marianne R. Valdez
Reviewers: Eric N. Quillip
Layout Artist: Mark G. Javillonar
Management Team: Aurelia B. Marquez
Rodgie S. Demalinao
Eric N. Quillip
Printed in the Philippines by ________________________
Department of Education – MIMAROPA Region – Schools Division of Palawan
Office Address: PEO Road, Bgy. Bancao-Bancao, Puerto Princesa City

Telephone: (048) 433-6392
E-mail Address: palawan@deped.gov.ph
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Introductory Message
For the facilitator:
Welcome to the Fundamentals of Accountancy, Business and Management 2 –

Grade 12 Modular Distance Learning (MDL) Self-Learning Module on the Statement
of Financial Position (SFP)!
This module was collaboratively designed, developed and reviewed by educators

from public institution to assist you, the teacher or facilitator in helping the
learners meet the standards set by the K to 12 Curriculum Most Essential Learning
Competencies (MELCs) in the “New Normal” situation while overcoming their
personal, social, and economic constraints in schooling.
This learning resource hopes to engage the learners into guided and independent
learning activities at their own pace and time. Furthermore, this also aims to help
learners acquire the needed 21st century skills while taking into consideration
their needs and circumstances.
In addition to the material in the main text, you will also see this box in the body of
the module:
Notes to the Teacher

This contains helpful tips or strategies
that will help you in guiding the learners.
As a facilitator, you are expected to orient the learners on how to use this module.
You also need to keep track of the learners' progress while allowing them to
manage their own learning. Furthermore, you are expected to encourage and assist
the learners as they do the tasks included in the module.
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For the learner:
Welcome to the Fundamentals of Accountancy, Business and Management 2 –

Grade 12 Modular Distance Learning (MDL) Self-Learning Module on the Statement
of Financial Position (SFP)!
This module was designed to provide you with fun and meaningful opportunities
for guided and independent learning at your own pace and time. You will be
enabled to process the contents of the learning resource while being an active
learner.
This module has the following parts and corresponding icons:
What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in
the module.
What I Know This part includes an activity that aims to

check what you already know about the
lesson to take. If you get all the answers
correct (100%), you may decide to skip this
module.
What’s In This is a brief drill or review to help you link

the current lesson with the previous one.
What’s New In this portion, the new lesson will be

introduced to you in various ways; a story, a
song, a poem, a problem opener, an activity
or a situation.
What is It This section provides a brief discussion of

the lesson. This aims to help you discover
and understand new concepts and skills.
What’s More This comprises activities for independent

practice to solidify your understanding and
skills of the topic. You may check the
answers to the exercises using the Answer
Key at the end of the module.
What I Have Learned This includes questions or blank

sentence/paragraph to be filled into process
what you learned from the lesson.
What I Can Do This section provides an activity which will

help you transfer your new knowledge or
skill into real life situations or concerns.
Assessment This is a task which aims to evaluate your

level of mastery in achieving the learning
competency.
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Additional Activities In this portion, another activity will be given
to you to enrich your knowledge or skill of
the lesson learned.
Answer Key This contains answers to all activities in the

module.
At the end of this module you will also find:
References This is a list of all sources used in

developing this module.
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!
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What I Need to Know
This module was designed and written with you in mind. It is here to help you
master the Statement of Financial Position (SFP). The scope of this module permits
it to be used in many different learning situations. The language used recognizes
the diverse vocabulary level of students. The lessons are arranged to follow the
standard sequence of the course. But the order in which you read them can be
changed to correspond with the textbook you are now using.
The module is composed of one lesson, namely:

• Lesson 1 – Identify the element of the Statement of Financial Position (SFP)
and describe each of them.
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 and the account form with proper
classification of items as current and noncurrent; and
3. appreciate the importance of the SFP in a business organization.
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What I Know
Directions: Choose the letter of the best answer and write your answer on a
separate sheet of paper.
1. It pertains to resources which are controlled and owned by the business.

a. Assets c. Equity
b. Liabilities d. Resources
2. It is derived from deducting the total liabilities to the total assets of a company.
a. Assets c. Equity
3. Which of the following pertains to the obligations that the business owed to other
entities arising from past events which are to be settled in the future?
a. Assets c. Equity
4. Which of the following is the correct Accounting Equation?

a. Assets + Liabilities = Equity c. Assets = Liabilities + Equity
b. Assets = Liabilities - Equity d. Assets + Equity = Liabilities
5. Which of the following is classified as Current Asset?

a. Prepaid Expenses c. Delivery Vehicle
b. Land d. Copyright
6. Which of the following financial statements presents the financial position of an

entity at a given or specific date?
a. Income Statement c. Statement of Changes in Equity
b. Statement of Financial Position d. Statement of Cash Flows
7. All of the following are classified as Assets, EXCEPT:

a. Accounts Receivable c. Building
b. Inventory d. Accounts Payable
8. Which of the following is classified as a non-current liability?

a. Accounts Payable c. Utilities Payable
b. Mortgage Payable d. Unearned Revenue
9. Which of the following is classified as a current asset?

a. Prepaid Rent c. Investments
b. Unearned Rent d. Drawings
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10. In which part of Statement of Financial Position does the Salaries Payable be
listed?
a. Assets c. Owner’s Equity
b. Liabilities d. Expenses
11. The following are elements of Statement of Financial Position EXCEPT:

a. Assets c. Equity
12. It is a form of the Statement of Financial Position that is presented in a

horizontal format.
a. Report form c. Digital form
b. Account form d. Line form
13. It is a form of the Statement of Financial Position that is presented in a vertical

format.
14. An item is considered current when__________________________________________?

a. It is expected to be used or converted into cash or to be paid for more than
one year.
b. It cannot be converted or realizable into cash within a year.
c. It is expected to be used or realizable into cash or to be paid within a year.
d. It has an expected life for more than 12 months
15. A non-current item is _________________________________.

a. expected to be used/realizable into cash or to be paid for more than one
year.
b. Expected to be converted or realizable into cash within a year.
c. expected to be used or paid within a year.
d. item bought for readily consumption/ production.
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Identify the element of the

Lesson
Statement of Financial Position
1 (SFP) and describe each of
them
The Statement of Financial Position (SFP), which is also known as the Balance
Sheet, shows the financial position of a business entity at a given period or a
specified date. Its purpose is to help the financial statement users in the
assessment of the financial health and soundness of a business entity in
determining its liquidity, financial, credit and business risks. It has three (3)
elements: 1. Assets (resources owned and controlled by the business); 2. Liabilities
(obligations owed to someone by the business); and 3. Equity or Owner’s Equity
(residual interest of the owners of the business or what was left of the assets after
paying the liabilities is the right of the owners).
The assets, aside from the capital investment of the owners, maybe financed from
outside sources (like loans from banks and other financial institutions or from
other creditors). The total assets should always be equal to the sum of the total
liabilities and total equity. Thus, the Accounting Equation is stated as: Assets =
Liabilities + Equity.
What’s In
As what you have learned from your Fundamentals of the Accountancy, Business
and Management 1 about the types of major accounts (Assets, Liabilities, Equity,
Income and Expenses), let us focus on the three major accounts which are also the
elements of the SFP or the Balance Sheet. These are the Assets, Liabilities and
Equity.

Begin the lesson by letting the students do Activity 1: “HULA ME”.
Let the student answer the given worksheet which will help them
identify and describe the key elements of the SFP.
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What’s New
The activity below will help you check how much you know about the key elements
of the Statement of Financial Position (SFP).
Activity 1: “HULA ME”

Directions:
1. Guess the account title being described in each sentence.
2. Identify what element of SFP (Assets, Liabilities or Equity) it is listed/ included.
3. Write your answers on the columns provided.
Description Account title SFP Element

1. I am used as a medium of
exchange in business
transactions. I may be held on
hand or put in banks for
safekeeping.
2. I can be in the form of cash or
other assets invested by the
owner to start- up a business.
3. I am items held for resale.
4. I am expenses paid in
advance.
5. I am expenses incurred but
not yet paid.
6. I am amounts due to suppliers
for the purchase of goods or
services received on account.
7. I am an amount taken by the
owner from the business for
personal use.
8. I am an account due with
supporting promissory notes.
9. I am an account due from
customers as a result of sale
of goods or for services
rendered.
10. I have a long- life and acquired
for use in business operations.
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What is It
In Activity 1, you were able to identify and describe some of the account titles and
the elements to which it belongs in relation to the Statement of Financial Position
(SFP). In this part of the module, you will learn further the preparation of SFP
using the report form and the account form with proper classification of items as
current and noncurrent.
The Statement of Financial Position (SFP): its classification, its

preparation and its form.
As mentioned earlier, the Statement of Financial Position (SFP) or the Balance
Sheet shows the financial position of a business entity at a given period or a
specific date. Following the accounting cycle the SFP and other financial
statements (which will be discussed in the succeeding modules) are prepared once
the adjusted trial balance is done to come- up with a fair balance sheet statement.
Assets, Liabilities and Equity are properly grouped and classified to give a
meaningful information. Assets are presented and classified by the order of its
liquidity or those that are readily available for use and can easily be converted into
cash are listed first and assets that cannot be easily converted into cash are listed
last. When it comes to liabilities, maturity matters. Those obligations that are
currently due are listed first. The Balance Sheet includes permanent and contra
asset accounts. An account is said to be permanent because their balances are
carried over from one accounting date to another. The Assets, Liabilities and Equity
accounts are permanent accounts. Contra asset accounts are accounts also
presented in the SFP as a deduction to a particular asset. These are Allowance for
Doubtful Accounts and Accumulated Depreciation. The Allowance for Doubtful
Accounts, a contra- asset for Accounts Receivable, it is an allowance made by the
business for estimated uncollectible accounts. An Accumulated Depreciation is
an account that represents depreciation of Fixed Assets (except for Land) due to its
usual wear and tear.
Classification of Assets, Liabilities and Equity

1. Assets are divided into current or non- current.
Current Assets- are items that are listed on a business’ statement of financial
position that are expected to be used or realized into cash within one accounting
period or a year. It usually includes cash, accounts receivable, inventories and
prepaid expenses. Cash is considered the most liquid asset because it is readily
available for use. It is used as a medium of exchange in business transactions and
may be held on hand or put in banks for safekeeping. Accounts Receivables are
accounts due from customers as a result of sale of goods or for services rendered
that are collectible within one year. Inventories are regarded as a current asset
because these are items held for resale because they are readily available (either
raw materials or finished goods). Prepaid expenses are considered current assets
because they are expenses paid in advance to be consumed within a year.
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Non- Current Assets- are items that are listed on a business’ statement of
financial position that cannot be used or realized into cash within one accounting
period or a year. It includes assets that are long- term in nature like fixed assets,
long-term investments and intangibles. Fixed assets includes Property, Plant and
Equipment (Furniture, equipment, land, building, vehicles, etc.) that are used
acquired for use in operations and have an estimated useful life of more than one
year. Long- term investments are investments made by the owners of the
business for long- term purposes like marketable securities. Intangible assets are
non- physical assets like Patents, Copyright and Franchise.
2. Liabilities are also divided into current or non- current.

Current Liabilities- are liabilities that should be paid and realized within a year
after the year- end date. These include Accounts Payable, Notes Payable, Accrued
Expenses and Unearned Income. Accounts Payable is amount due to suppliers for
the purchase of goods or services received on account to be paid within a year.
Notes Payable is account due with supporting promissory notes with short-term
mode of payments. Accrued Expenses are expenses incurred but not yet paid,
examples are Salaries Payable, Taxes Payable, etc. Unearned Income is cash
collected or given in advance from customers for future delivery of goods or services
to be performed.
Non- Current Liabilities- are liabilities that are to be paid for more than a year
from the year- end date. These include Loans Payable, Mortgage Payable, etc.
Loans Payable is account due from third parties which was agreed to be paid for
longer terms. Mortgage Payable is account due from third parties with associated
collaterals to be paid for longer terms.
3. Equity
Equity or Owner’s Equity is the residual interest of the owners of the business or
what was left of the assets after paying the liabilities is the right of the owners. It
includes the Capital and Drawing accounts. Capital is the investment made by the
owner to start- up a business in the form of cash or other assets. Drawing or
withdrawal is an amount taken by the owner from the business for personal use.
Steps in preparing a simple Statement of Financial Position (SFP):
1. You should start with a heading. The heading includes the name of the
business or entity (ex. JD Gardens), name of the financial statement (ex.
Statement of Financial Position) and the reporting date/ period (ex. As of
December 31, 2019). We use as of in SFP because the amounts (in Philippine
Peso) of the items are cumulative from the start of the operations of the
business up to the accounting date.
2. Assets are presented first. These are classified into current and non- current
assets.
3. Next is to present the Liabilities. These should also be classified into current
and non- current liabilities.
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4. Equity/ Owner’s Equity is then added after the liabilities to complete the
accounting equation (Assets= Liabilities + Equity).
Dale’s Garden
As of December 31, 2019
ASSETS
Current Assets
Cash PhP 250,000.00
Accounts Receivable 85,000.00
Garden Supplies and Materials 185,000.00
Prepaid Expenses 48,000.00
Total Current Assets Php 568,000.00
Non- Current Assets

Garden Tools and Equipment PhP 285,000.00
Accumulated Depreciation ( 95,000.00) PhP 190,000.00
Delivery Vehicle 500,000.00
Accumulated Depreciation ( 62,500.00) 437,500.00
Land 1,500,000.00
Building 550,000.00
Accumulated Depreciation ( 55,000.00) 495,000.00
Total Non- Current Assets PhP 2,622,500.00
TOTAL ASSETS PhP 3,190,500.00

================
LIABILITIES
Current Liabilities
Accounts Payable PhP 355,000.00
Notes Payable, 1 year 150,000.00
Salaries Payable 35,500.00
Total Current Liabilities PhP 540,500.00
Non-Current Liabilities
Notes Payable, 7 years 350,000.00
TOTAL LIABILITIES PhP 890,500.00
OWNER’S EQUITY
Owner’s Equity
D. Ramos, Capital PhP 2,300,000.00
TOTAL LIABILITIES AND OWNER’S EQUITY PhP 3,190,500.00

================
The illustration is an example of a simple statement of financial position of a

single/ sole proprietorship. Other forms of business organizations (partnership and
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corporation) have different presentation depending on the nature of its business.
The total assets must be always equal to the total liabilities and owner’s equity. The
total assets, as well as, the total liabilities and equity are double ruled showing that
it is the end part of a financial statement.
Forms of Statement of Financial Position (SFP)
The Statement of Financial Position (SFP) has two forms, the Report form and the
Account Form. The format in the preparation of the SFP depends on the preference
but most financial users prefer to use the report form because it is easier to read
especially when comparing multiple years SFP.
Report Form- it is a form of SFP wherein accounts are presented vertically, the
Assets first, followed by the Liabilities and then the Equity. The above presented
Balance Sheet is an example of a Report Form SFP.
Account Form- it is a form of SFP wherein accounts are presented horizontally,

the Assets are presented on the left side while the Liabilities and the Equity are on
the right side of the Balance Sheet. It will look like the debit and credit balances of
an account.
Dale’s Garden
As of December 31,2019
ASSETS LIABILITIES AND OWNER’S EQUITY
Current Assets Current Liabilities
Cash ₱250,000.00 Accounts Payable ₱355,000.00
Accounts Receivable 85,000.00 Notes Payable, 1 year 150,000.00
Garden Supplies and Materials 185,000.00 Salaries payable 35,500.00
Prepaid Expenses 48,000.00 Total Current Liabilities ₱540,500.00
Total Current Assets ₱568,000.00
Non- Current Assets Notes Payable, 7 years ₱350,000.00
Total Non-Current
Garden Tools and Equipment ₱285,000.00 Liabilities ₱350,000.00
Accumulated Depreciation (95,000.00) ₱190,000.00
Delivery Vehicle 500,000.00 Total Liabilities ₱890,500.00
Accumulated Depreciation (62,500.00) 437,500.00
Land 1,500,000.00 Owner's Equity
Building 550,000.00 D. Ramos, Capital ₱2,300,000.00
Accumulated Depreciation (55,000.00) 495,000.00 Total Owner's Equity ₱2,300,000.00
Total Non- Current Assets ₱2,622,500.00
TOTAL LIABILITIES &
TOTAL ASSETS ₱3,190,500.00 OWNER'S EQUITY ₱3,190,500.00

The brief discussion above provided enough information for the
students to do the activities on the succeeding pages. Such
activities are designed for individual preparation and lesser
teacher intervention.
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What’s More
Activity 2: “LET’S CLASSIFY”

Directions: Determine the classification of the following accounts as to ASSET,
LIABILITY AND EQUITY. For Asset and Liability accounts, determine also how it is
treated as to CURRENT OR NON- CURRENT.
No. ACCOUNT TITLE ACCOUNT CLASSIFICATION

1. Cash
2. Furniture and Fixtures
3. Land
4. Notes Payable
5. Notes Receivable
6. DSD, Capital
7. Accounts Receivable
8. Vehicle
9. Building
10. Taxes Payable
11. Mortgage Payable
12. DSD, Drawings
13. Prepaid Rent
14. Utilities Payable
15. Marketable Securities
Activity 3: “PRAKTISADO AKO 1”

Directions: Prepare a properly classified Statement of Financial Position using the
report form.
Mr. Dale Ramos, owned a plant shop named Dale’s Gardens. He hired you to
prepare his plants shop’s Statement of Financial Position for the year 2019. The
following shows the assets and liabilities of Mr. Ramos:
a. His plant shop has cash in bank account amounting to P150,000.
b. His plant shop has uncollected sales from customers amounting to P125,000.
c. The total amount of garden supplies and materials after inventory showed
P80,000 on hand.
d. He already paid one year’s advertisement in advance in a local newspaper
amounting to P12,000
e. Total value of all the shop’s garden tools and equipment amounted to P150,000
f. He bought garden supplies and materials on account from his supplier
amounting to P155,000 to be paid within three months after the year- end.
g. Salaries unpaid to his three employees totaled P21,000.00.
h. Utilities amounting to P6,000.00 remained unpaid as of year- end.
i. His outstanding loan balance amounted to P45,000 will be paid within 5 years.
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Activity 4: “PRAKTISADO AKO 2”

Directions: Using the same data in Activity 3, prepare a properly classified
Statement of Financial Position using the account form.

Activities 2, 3 and 4 are designed to develop and enrich students’
knowledge on the Statement of Financial Position (SFP). The
activities ensure that students’ full understanding of the lesson is
achieved.
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What I Have Learned
At this point, let us see how much you have gained from the discussions and
activities you have undergone.
Activity 5: “PROBLEM MO, SOLVE KO”

Directions: Analyze the given situations, solve and give the appropriate answers.
Use a separate sheet of paper.
1. Wash and Wear Laundry has current assets amounting to Php 300,000.
Noncurrent assets for the year totaled Php 89,000. How much is the laundry’s total
assets?
2. Read Me Book Shop has assets of Php 2,000,000.00 and owner’s equity of Php
600,000.00. How much is the book shop’s total liabilities?
3. No Melt Ice Cream parlor has liabilities of Php 395,000.00 and assets of Php
524,000.00. How much is the ice cream parlor owner’s equity?
4. Everyday Bake Shop has total liabilities amounting to Php 35,000. Total equity
had an ending balance of Php 42,000. How much is total assets?
5. Choose Me Boutique had the following accounts at year end: Cash- PhP250,000,
Accounts Payable-PhP70,000, Prepaid Expense-PhP15,000. Compute for the
company’s current assets.
6. A hotel company has owner’s equity of PhP 5,000,000.00 and liabilities of PhP
2,560,000.00. How much is the company’s total assets?
7. At the beginning of the year, the assets of Dale’s Services were PhP 560,000.00
and its Owner’s Equity was PhP 250,000.00. During the year, assets were
increased by PhP 120,000.00 and liabilities increased by PhP 20,000.00. What was
the owner’s equity at the end of the year?
8. Happy Selling’s Accounts Receivable amounted to Php 500,000. Prepaid Expense

and Unearned Income totaled Php 30,000 and Php 10,000 respectively. Cash
balance amounted to Php 100,000 while Accounts Payable and Inventory totaled to
Php 20,000 and Php 10,000 respectively. How much is the company’s current
assets? Current liabilities?
9. Company’s Total Liabilities and Equity amounted to Php 285,000. Total

noncurrent assets ended at Php 85,000. Cash totaled Php 50,000. Inventory
amounted to Php100,000. Assuming the company had no other assets, how much
is Accounts Receivable?
10. Total assets amounted to Php575,000. Total equity amounted to Php 250,000.
Accounts Payable amounted to Php 50,000 while Unearned Income totaled Php
85,000. Assuming there are no other current liabilities, compute for the company’s
noncurrent liabilities.
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What I Can Do
This activity will help you transfer into real-life situations the knowledge and skills
you have gained or learned from this module.
Activity 6: “OWNED and OWED KO” (Make your own SFP)

Direction:
1. On a separate sheet of paper, make a list of your savings (if you have any)
and then everything that you personally own (cellphone, clothes, accessories,
bags, jewelries, etc.). Make sure to estimate the amounts/ values of what
you have listed.
2. Next is to list down what you owed from your parents, other family members
and friends.
3. Deduct the amount you owe (liabilities) from the amount of what you own
(assets).
4. Determine what was left of you (equity).
Guide Questions:
1. What did you feel while doing the activity?
2. Were you able to differentiate what you owned from what you owed?
3. What do you think is the importance of knowing one’s SFP?
4. Do you think having more assets in a business means that the business is
earning?
Rubrics in Rating Activity 4: “OWNED and OWED KO” (Make your own SFP)
Standard Identifying one’s own assets, liabilities and equity
5 Comprehensively and clearly answered the guide questions.
4 Satisfactorily and clearly answered the guide questions.
3 Fairly and clearly answered the guide questions.
2 Provided short discussions on the guide questions.
1 Provided a little idea about the guide questions.
13
Assessment
Directions: Choose the letter of the best answer and write your answer on a
separate sheet of paper.
1. A non-current item is _________________________________.

a. expected to be used/realizable into cash or to be paid for more than one
year.
b. expected to be converted or realizable into cash within a year.
c. expected to be used or paid within a year.
d. item bought for readily consumption/ production.
2. An item is considered current when__________________________________________?
a. It is expected to be used or converted into cash or to be paid for more than
one year.
b. It cannot be converted or realizable into cash within a year.
c. It is expected to be used or realizable into cash or to be paid within a year.
d. It has an expected life for more than 12 months
3. It is a form of the Statement of Financial Position that is presented in a vertical

format.
4. It is a form of the Statement of Financial Position that is presented in a

horizontal format.
5. The following are elements of Statement of Financial Position EXCEPT:

a. Assets c. Equity
6. In which part of Statement of Financial Position does the Salaries Payable be

listed?
a. Assets c. Owner’s Equity
7. Which of the following is classified as a current asset?

a. Prepaid Rent c. Investments
b. Unearned Rent d. Drawings
8. Which of the following is classified as a non-current liability?

a. Accounts Payable c. Utilities Payable
b. Mortgage Payable d. Unearned Revenue
9. All of the following are classified as Assets, EXCEPT:

a. Accounts Receivable c. Building
b. Inventory d. Accounts Payable
14
10. Which of the following financial statements presents the financial position of
an entity at a given or specific date?
a. Income Statement c. Statement of Changes in Equity
b. Statement of Financial Position d. Statement of Cash Flows
11. Which of the following is classified as Current Asset?

a. Prepaid Expenses c. Delivery Vehicle
b. Land d. Copyright
12. Which of the following is the correct Accounting Equation?

a. Assets + Liabilities = Equity c. Assets = Liabilities + Equity
b. Assets = Liabilities - Equity d. Assets + Equity = Liabilities
13. Which of the following pertains to the obligations that the business owed to
other entities arising from past events which are to be settled in the future?
a. Assets c. Equity
14. It is derived from deducting the total liabilities to the total assets of a
company.
a. Assets c. Equity
15. It pertains to resources which are controlled and owned by the business.
a. Assets c. Equity
15
Additional Activities
Let us reinforce the skills/knowledge that you have gained from this lesson by
doing the next activity.
Activity 7: PROBLEM SOLVING AND ANALYSIS
Direction: From these randomly ordered accounts of Josh Trading prepare a

properly classified Balance Sheet (in report form). The balances shown are as of
12/31/2019.
Sales Returns and Allowances PhP 11,000.00

Accumulated Depreciation 50,000.00
Merchandise Inventory, December 31, 2019 80,000.00
Sales 1,050,000.00
Merchandise Inventory, January 1, 2019 100,000.00
Purchases 400,000.00
Selling Expenses 190,000.00
Accounts Payable 100,000.00
Purchase Returns and Allowances 2,000.00
Cash 50,000.00
Office Equipment 220,000.00
Withdrawals 50,000.00
Sales Discounts 29,000.00
Transportation-In 10,000.00
General and Administrative Expense 200,000.00
Office Supplies 30,000.00
Notes Payable 200,000.00
Prepaid Rent 100,000.00
Josh, Capital, Jan. 1, 2019 200,000.00
Purchase Discounts 8,000.00
Net Income from operation 200,000.00
16
17
Activity 1 Activity 2: “HULA ME”
What I Know
“HULA ME”
1. Cash- Assets 1. Asset- Current
1. A
2. Capital- Equity 2. Asset- Non-Current
2. C
3. Inventories- Assets 3. Asset- Non-Current
3. B
4. Prepaid Expenses- 4. Liabilities- Current
4. C
Assets 5. Asset- Current
5. A 5. Accrued Expenses- 6. Equity
6. B Liabilities 7. Asset- Current
7. D 6. Accounts Payable- 8. Asset- Non-Current
8. B Liabilities
9. Asset- Non-Current
9. A 7. Drawings- Equity
8. Notes Payable- 10. Liabilities- Current
10. B
Liabilities 11. Liabilities- Non-
11. D
9. Accounts Receivable- Current
12. B
Assets 12. Equity
13. A
10.Property, Plant and 13. Asset- Current
14. C Equipment- Assets 14. Liabilities- Current
15. A
15. Asset- Non-Current
Cash
ASSETS
Activity 3: “Praktisado Ako 1”

Current Assets
TOTAL ASSETS
Dale’s Garden
Non- Current Assets
Total Current Assets
Prepaid Advertising
Accounts Receivable
ASSETS
Garden Tools and Equipment
Current Assets
Garden Supplies and Materials
Cash PhP 150,000.00

Garden Supplies and Materials 80,000.00
Prepaid Advertising 12,000.00
Php
PhP

PhP
Non- Current Assets

Garden Tools and Equipment 150,000.00
TOTAL ASSETS PhP 517,000.00
================
PhP 517,000.00
150,000.00
367,000.00
================
125,000.00
12000.00
80,000.00
150,000.00
LIABILITIES
Dale’s Garden
Current Liabilities
Salaries Payable 21,000.00

Utilities Payable 6,000.00
Total Current Liabilities PhP 182,000.00

Notes Payable, 5 years 45,000.00
Owner’s Equity
Activity 4 : “ Praktisado Ako 2”
Utilities Payable
Salaries Payable
Current Liabilities
Accounts Payable
OWNER’S EQUITY TOTAL LIABILITIES
D. Ramos, Capital
Total Current Liabilities
Owner’s Equity Notes Payable, 5 years

D. Ramos, Capital PhP 290,000.00
TOTAL LIABILITIES AND OE

TOTAL LIABILITIES AND OE PhP 517,000.00
PhP
PhP
PhP
PhP
LIABILITIES AND OWNER’S EQUITY
================
PhP 517,000.00
227,000.00
290,000.00
45,000.00
=================
182,000.00
6,500.00
21,000.00
155,000.00
Answer Key
18
Activity 5: “PROBLEM MO, SOLVE
KO”
Assessment
1. PhP 389,000.00
2. 1,400,000.00
3. 129,000.00
1. A 9. D
4. 77,000.00
2. C 10. B
5. 265,000.00
3. A 11. A
6. 2,440,000.00
4. B 12. C
7. 330,000.00
5. D 13. B
8. CA-540,000.00
6. B 14. C
CL- 30,000.00
7. A 15. A
9. 30,000.00
8. B
10. 190,000.00
Activity 7
Josh Trading
ASSETS
Current Assets
Cash PhP 50,000.00
Mdse. Inventory, 12/31,2019 80,000.00
Office Supplies 30,000.00
Prepaid Rent 100,000.00
Non- Current Assets
Office Equipment PhP 220,000.00
Accum. Depreciation( 50,00.00) 170,000.00
TOTAL ASSETS PhP 650,000.00
================
Activity 6 Students’ answers might
LIABILITIES
vary. Scoring will be based on the
Rubrics Current Liabilities
Notes Payable 200,000.00
OWNER’S EQUITY
Owner’s Equity
Josh, Capital, 1/1/2019 PhP 200,000.00
Less: Withdrawals ( 50,000.00)
Josh, Capital, 12/31/2019 150,000.00
Add: Net Income from operation 200,000.00
Total Owner’s Equity PhP 350,000.00
TOTAL LIABILITIES AND OE PhP 650,000.00
================
References
Ballada, W. Fundamentals of Accountancy, Business and Management 2 Made
Easy. Philippines: DomDane Publishers, 2018
De Guzman, A. Fundamentals of Accountancy, Business and Management 2 For
Senior High School. Philippines: Lorimar Publishing, Inc., 2018
Monfero, R.P. , et. Al. Teaching Guide for Senior High School: Fundamentals of
Accountancy, Business and Management 2. Philippines: Published by
Commission on Higher Education (CHED), 2016
19
For inquiries or feedback, please write or call:
Department of Education – SDO Palawan
Curriculum Implementation Division Office

2nd Floor Deped Palawan Building
Telephone no. (048) 433-6392
Learning Resources Management Section

LRMS Building, PEO Compound
Telephone no. (048) 434-0099

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12

Published by the Department of Education, Division of Palawan

Development Team of the Module

Printed in the Philippines by ________________________

Department of Education – MIMAROPA Region – Schools Division of Palawan

Office Address: PEO Road, Bgy. Bancao-Bancao, Puerto Princesa City

Welcome to the Fundamentals of Accountancy, Business and Management 2 –

This module was collaboratively designed, developed and reviewed by educators

Notes to the Teacher

Welcome to the Fundamentals of Accountancy, Business and Management 2 –

This module has the following parts and corresponding icons:

What I Know This part includes an activity that aims to

What’s In This is a brief drill or review to help you link

What’s New In this portion, the new lesson will be

What is It This section provides a brief discussion of

What’s More This comprises activities for independent

What I Have Learned This includes questions or blank

What I Can Do This section provides an activity which will

Assessment This is a task which aims to evaluate your

Answer Key This contains answers to all activities in the

At the end of this module you will also find:

References This is a list of all sources used in

The following are some reminders in using this module:

What I Need to Know

The module is composed of one lesson, namely:

After going through this module, you are expected to:

1. It pertains to resources which are controlled and owned by the business.

4. Which of the following is the correct Accounting Equation?

5. Which of the following is classified as Current Asset?

6. Which of the following financial statements presents the financial position of an

7. All of the following are classified as Assets, EXCEPT:

8. Which of the following is classified as a non-current liability?

9. Which of the following is classified as a current asset?

11. The following are elements of Statement of Financial Position EXCEPT:

12. It is a form of the Statement of Financial Position that is presented in a

13. It is a form of the Statement of Financial Position that is presented in a vertical

14. An item is considered current when__________________________________________?

15. A non-current item is _________________________________.

Identify the element of the

Notes to the Teacher

Activity 1: “HULA ME”

2. Identify what element of SFP (Assets, Liabilities or Equity) it is listed/ included.

3. Write your answers on the columns provided.

Description Account title SFP Element

The Statement of Financial Position (SFP): its classification, its

Classification of Assets, Liabilities and Equity

2. Liabilities are also divided into current or non- current.

Non- Current Assets

TOTAL ASSETS PhP 3,190,500.00

TOTAL LIABILITIES PhP 890,500.00

TOTAL LIABILITIES AND OWNER’S EQUITY PhP 3,190,500.00

The illustration is an example of a simple statement of financial position of a

Forms of Statement of Financial Position (SFP)

Account Form- it is a form of SFP wherein accounts are presented horizontally,

Notes to the Teacher

Activity 2: “LET’S CLASSIFY”

No. ACCOUNT TITLE ACCOUNT CLASSIFICATION

Activity 3: “PRAKTISADO AKO 1”

Activity 4: “PRAKTISADO AKO 2”