FABM 2
Name: Anne Christine C. Dela Cruz Date: September 9, 2020
Grade/Section/Track: Grade 12 - Aguinaldo (ABM)
Offline Activity #1:
Directions: Answer each statement explicitly. Pages may be added.
1. Identify the elements of the SFP and describe each of them.
● Assets - something the business already owns; the business can benefit from it
- could be classified as Current and Noncurrent Assets
- Current Assets - assets that an entity expects to use within one-year time
from the reporting date.
- Noncurrent Assets - assets whose benefits are expected to last more
than one year from the reporting date.
- A = L + OE
● Liabilities - something the business owes, may it be to a supplier or to clients; it
is the obligation of the business
- could be classified as Current and Noncurrent Assets
- Current Assets - liability which the entity expects to pay off within one
year from the reporting date
- Noncurrent Assets - liability which the entity expects to settle after one
year from the reporting date.
- L = A - OE
● Equity - what the owners of an entity have invested in an enterprise
- represents what the business owes to its owners
- a reflection of the capital left in the business after assets of the entity are
used to pay off any outstanding liabilities
- includes share capital contributed by the shareholders along with any
profits or surpluses retained in the entity
- OE= A - L
● Revenue - an increase in the net assets of the entity during an accounting period
except for such increases caused by the contributions from owners
- result in an increase in the net assets (equity) of the entity such as by the
inflow of cash or other assets
● Expenses - a decrease in the net assets of the entity over an accounting period
except for such decreases caused by the distributions to the owners
- “payment of a company's utility bills reduces cash”
2. Classify the elements of the SFP into current and noncurrent items.
CURRENT NONCURRENT
ASSETS ● Cash ● Land
● Accounts Receivable ● Machinery
● Notes Receivable ● Office Equipment
● Prepaid Expenses ● IT Equipment
● Inventory ● Delivery Equipment
● Unused Office ● Furniture & Fixtures
Supplies ● Building
● Advances to
Employees
LIABILITIES ● Accounts Payable ● Mortgage Payable
● Notes Payable ● Loans Payable
● Expenses Payable
3. Give an example of an SFP of a single proprietorship and explain the steps how it is
prepared.
Here is a sample of a balance sheet from a small business. To get this
and balance the results, you need to list down first all the account titles used in
all the transactions of the business, depending on what month or year you are
computing the financial position. First, list down all the assets and sum up their
values, subtracting the accumulated depreciation when necessary. Then list all
the liabilities and owner’s equity, sum up all the values from both elements. This
is a prolonged version of the equation A = L + OE. The sum of the total assets
must equal to the sum of liabilities and owner’s equity.
4. On your own, prepare an SFP using the report form and the account form with proper
classification of items as current and noncurrent.
Account Form
Report Form
Citation:
Elements of the financial Statements. (n.d.). Retrieved September 09, 2020, from
https://accounting-simplified.com/elements-of-financial-statements.html
What is a Report Form Balance Sheet? - Definition: Meaning: Example. (n.d.). Retrieved
September 09, 2020, from https://www.myaccountingcourse.com/accounting-
dictionary/report-form-balance-sheet
GOOD LUCK & GOD BLESS!
