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Fabm Notes Grade 12

The document discusses key concepts related to financial statements. It defines current assets as assets that can be easily disposed of like cash, accounts receivable, inventory. It also defines non-current assets as long-term assets like property, plant and equipment. It discusses contra asset accounts that are deducted from related asset accounts like allowance for doubtful accounts. The document also provides examples of calculations for the statement of financial position, statement of comprehensive income, and statement of cash flows.

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1K views

Fabm Notes Grade 12

The document discusses key concepts related to financial statements. It defines current assets as assets that can be easily disposed of like cash, accounts receivable, inventory. It also defines non-current assets as long-term assets like property, plant and equipment. It discusses contra asset accounts that are deducted from related asset accounts like allowance for doubtful accounts. The document also provides examples of calculations for the statement of financial position, statement of comprehensive income, and statement of cash flows.

Uploaded by

hello hahah
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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 Inventories – represent unsold goods at the end

FABM of the accounting period. Merchandising


business.
 Prepaid Express – include supplies bought for
use in the business to be received by the
business in the future, paid in advance
 Contra-Asset Accounts – accounts deducted
Statement of Financial Position from the related asset accounts
 The balance sheet
 Includes amounts of the company’s total assets,
liabilities, and owner’s equity which in totality B. Non-Current Assets – hindi madaling nawawala;
provides the condition of the company on a long term
specific date (related to Accounting Equation)
 Four phases of Accounting : Recording, Long term investments
Classifying, Summarizing, Interpreting Property, Plant, and Equipment
Intangible Assets –
Permanent Accounts
 Permanent in a sense that their balances remain
intact from one accounting period (1 yr) to
another
 Cash, AR, AP, Loans Payable, Capital
Contra Assets
 Accounts that are presented under the assets
portion of the SFP but are reduction to the
company’s assets
 Allowance for doubtful accounts (Contra Asset
to A.R., di na makolektang pinautang mo)
 Accumulated Depreciation (Contra Asset to the
company’s property, plant, and equipment

A. Current Assets – madaling nadidispose


Classified and presented accdng to liquidity with the
most liquid followed by this with lesser liquidity. Since
cash is the most liquid, it is always listed first.
 Cash – coins, currencies, checks
 Cash Equivalents – short-term investments that
are readily convertible to cash which are subject
to significant risk to changes in value
 Marketable Securities – stocks and bonds
purchased by the enterprise and are to be held
for only short span of time. Usually purchased
when business has excess cash.
 Trade and other receivables – AR, NR, Interest
Receivable, Advances to Employees, Accrued
Income (Income already earned but not yet
servicing)
1. 895,000
2. 275,000
3. 100,000
4. 150,000
5. 1,170,000

SINGLE STEP STATEMENT OF


COMPREHENSIVE INCOME FOR A SERVICE
BUSINESS

640/30
Assets – addition 500 AR, Prepaid expense, Unearned
income, Cash Balance
Liabilities -
Gross income : 120,000 (UNANG INCOME, PERO DI
PA NATATANGGAL MGA DAPAT TANGGALIN)
Expenses : 61,200
Net income: 58,800
GOODS AVAILABLE FOR SALE 203,000 OPERATING EXPENSES = 25,000
beginning inventory + purchases + freight in - purchase BEGINNING INVENTORY = 5,000
discount = 203,000 SALES = 85,000 purchases – (freight in + purchase
GROSS PROFIT 50,000 discount)
goods available for sale – ending inventory = 150,000 –
sales = 50,000
NET INCOME/LOSS 30,000
gross profit – operating expenses = 50,000 – 20,000

Goods available for sale = 505,000


Ending Inventory = 25,000
Gross profit = 20,000
PURCHASES – 200,000
beginning inventory + freight in – purchase discount
= 53,000 – goods available for sale = 200,000
ENDING INVENTORY – 36,000
sales – gross profit = 217,000 – goods available for
sale = 36,000
OPERATING EXPENSES – 110,000
Gross profit – (negative na net income)
83,000 – (– 27,000) = 110,000
STATEMENT OF
CASH FLOWS
Presents the sources and utilization of an
organization’s cash and cash equivalents
Useful for predicting future cash outflows and inflows
of the organization
Information will aid the organization in their financing
decisions
Financial Analysis
- to see if the business is healthy enough

Horizontal Analysis (Trend Analysis)


-

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