STATEMENT OF
FINANCIAL
POSITION
Prepared by:
RICHPHER G. GAGALAC
Let’s Try This! (3 minutes) DEBIT
CREDIT
Write the Word DEBIT or CREDIT if it pertains to the
normal balance of the following account title
1. Cash
2. Unearned Revenue
3. Prepaid Rent
4. Equity
5. Revenue
6. Expenses
Let’s Try this too! (2 minutes)
II – Classify the following as ASSETS, LIABILITY or
EQUITY.
1. Prepaid Rent
2. Unearned Income
3. Accrued Salaries
4. Depreciation Expense
5. Interest Revenue
ELEMENTS OF THE STATEMENT OF
FINANCIAL POSITION (30 minutes)
• The SFP is a report based on
the accounting equation
(Assets = Liabilities + Equity).
Memory Aid for learners is
ALE. It was called “Balance
Sheet” because the sum of the
assets must be balance to the
sum of the liabilities and
equity. The SFP is ‘balance’ as
a consequence of double entry
accounting.
ELEMENTS OF THE STATEMENT
OF FINANCIAL POSITION
• Assets - is a resource controlled by the enterprise as a
result of past events and from which future economic
benefits are expected to flow to the enterprise.
• Liabilities - are obligations that the company is
required to pay.
• Equity – is the residual interest after deducting the
total liabilities from total assets
Assets CURRENT ASSETS
CASH
• Current Assets – Assets
that can be realized ACCOUNTS RECEIVABLE
(collected, sold, used up)
NOTES RECEIVABLE
one year after year-end
date. INVENTORY
• Examples include Cash,
Accounts Receivable, PREPAID EXPENSES
Merchandise Inventory,
Prepaid Expense, etc. SHORT-TERM INVESTMENTS
Assets NONCURRENT ASSETS
LAND
• Noncurrent Assets – Assets that
BUILDINGS
cannot be realized (collected,
sold, used up) one year after VEHICLES
year-end date. Examples
include Property, Plant and MACHINERY
Equipment (equipment,
furniture, building, land), Long EQUIPMENT
Term investments, Intangible
Assets etc. FURNITURES AND FIXTURES
LONG-TERM INVESTMENTS
LIABILITIES CURRENT LIABILITIES
ACCOUNTS PAYABLE
• Current Liabilities – Liabilities NOTES PAYABLE
that fall due (paid, recognized
as revenue) within one year ACCRUED EXPENSES
after yearend date.
SHORT TERM LOANS
Examples include Notes Payable, UNEARNED REVENUES
Accounts Payable, Accrued
Expenses (example: Utilities
Payable), Unearned Income, etc.
LIABILITIES NONCURRENT LIABILITIES
• Noncurrent Liabilities – BONDS PAYABLE
Liabilities that do not fall due
(paid, recognized as revenue) MORTGAGE PAYABLE
within one year after year-end
LONG TERM LOANS
date.
Examples include Loans Payable,
Mortgage Payable, etc
EQUITY EQUITY
WITHDRAWA
• Equity – is the residual CAPITAL
L
interest after deducting
the total liabilities from NET LOSS NET INCOME
total assets
• This includes owner’s
capital, withdrawal and
net income
GROUP ACTIVITY
ASSETS LIABILITIES EQUITY
List your assets here List your liabilities here List your equity here
Written Work
Let’s Explore This (5 minutes)
Make a trial balance using the following
accounts below:
Cash - P 100,000
Service Revenue – P35,000
ABM, Capital - ?
Salaries Expense – P15,000
Accounts Payable - P25,000
ABM, Drawings - P5,000
Building - P50,000
Differentiate the Report Form
and Account Form
• Report Form – A form of the • Account Form – A form of the SFP that
SFP that shows asset shows assets on the left side and liabilities
and owner’s equity on the right side just
accounts first and then like the debit and credit balances of an
liabilities and owner’s equity account. (Haddock, Price, & Farina, 2012)
accounts after. (Haddock,
Price, & Farina, 2012) The a. Emphasize that the two are only formats
balance sheet shown earlier and will yield the same amount of total
is in report form. assets, liabilities and equity
b. Emphasize that assets should always be
equal to liabilities and equity
Sample of Report Form
Sample Account form
Company Name
Statement of Financial Position
As of December 31, 20XX
ASSETS LIABILITIES
Current Assets Current Liabilites
Cash P 1000 Accounts Payable P 300
Accounts Receivable 500 Accrued Payable 200
Notes Receivable 700 Unearned Income 250
Inventories 600 Notes Payable 250
Prepaid Expenses 300 Total Current Liabilities 1,000
Total Current Assets P 3,100
Non Current Liabilities
Non Current Assets Long-term Payable P 1,200
Property, Plant and
P 2,000 Total Non-Current Liabilitites P 1,200
Equipment
Accumulated Depreciation (500)
Total Non-Current Assets P 1,500 EQUITY
Owner, Capital 2,400
TOTAL LIABILITIES AND
TOTAL ASSETS P 4,600
EQUITY P 4,600
Let’s Try This (5 minutes)
• 1. Learning is Fun Company had current assets amounting to Php 100,000.
Noncurrent assets for the year totaled Php 76,000. How much is the company’s
total assets?
• 2. Happy Selling’s had the following accounts at year end: Cash-250,000,
Accounts Payable-70,000, Prepaid Expense-15,000. Compute for the company’s
current assets.
• 3. Company’s Total Liabilities and Equity amounted to Php 285,000. Total
noncurrent assets ended at Php 85,000. Cash totaled Php50,000. Inventory
amounted to Php100,000. Assuming the company had no other assets, how much
is Accounts Receivable?
Performance Task
References
• https://www.deskera.com/blog/assets/
• Teaching Guide for Senior High School FUNDAMENTALS OF
ACCOUNTANCY, BUSINESS, AND MANAGEMENT 2
• Fundamentals of Accountancy, Business and Management 2 by: Win
and Susan Ballada, CPA
• c. Fundamentals of Accountancy, Business and Management 2 –
Joselito G. Florendo
