Emay Template Revised

Plan
Training
Session
Date Developed: Document No. BKK - 001

June 15, 2019 Issued by:
Bookkeeping NC III Date Revised:
July 29, 2019 Page i of vii
Prepare Financial Developed by:
KING SOLOMON
Reports EMAY JEAN M. INSTITUTE, INC.
PESCADERO Revision # 1
Name: Date:
Sample Data Gathering Instrument for Trainee’s

Characteristics
Please answer the following instrument according to the
characteristics described below. Encircle the letter of your choice that best
describes you as a learner. Blank spaces are provided for some data that
need your response.
Characteristics of learners
Language, Average grade in: Average grade in:

literacy and English Math
numeracy (LL&N)
a. 95 and above a. 95 and above
b. 90 to 94 b. 90 to 94
c. 85 to 89 c. 85 to 89
d. 80 to 84 d. 80 to 84
a. 75 to 79 e. 75 to 79
Cultural and Ethnicity/culture:

language a. Tboli
background
b. Blaan
c. Ilonggo
d. Ilocano
e. Muslim
f. Cebuano
g. Aklanon
h. Others( please specify)____________
Education & Highest Educational Attainment:

general a. Elementary Level
knowledge
b. Elementary Graduate
c. High School Level
d. High School Graduate
e. College Level
f. College Graduate

July 29, 2019 Page 2 of vii
KING SOLOMON
g. with units in Master’s degree
h. Masteral Graduate
i. With units in Doctoral Level
j. Doctoral Graduate
Sex a. Male
b. Female
Age Your age: ____37_
Physical ability 1. Disabilities(if any)_____________________
2. Existing Health Conditions (Existing illness
if any)
a. None
b. Asthma
c. Heart disease
d. Anemia
e. Hypertension
f. Diabetes
g. Others(please specify) __allergies to
crustaceans_________________
Previous List down trainings related to your

learning qualification
experience ___________________________
___________________________
___________________________
National Certificates acquired and NC level
Training Level
completed Housekeeping NCII_
Special courses Other courses related to your qualification

a. Units in education
b. Master’s degree units in education
c. Others(please specify)
_________________________
Learning styles a. Visual - The visual learner takes mental

pictures of information given, so in order
for this kind of learner to retain
information, oral or written, presentations
of new information must contain diagrams
and drawings, preferably in color. The
visual learner can't concentrate with a lot
KING SOLOMON
of activity around him and will focus better

and learn faster in a quiet study
environment.
b. Kinesthetic - described as the students in
the classroom, who have problems sitting
still and who often bounce their legs while
tapping their fingers on the desks. They are
often referred to as hyperactive students
with concentration issues.
c. Auditory- a learner who has the ability to
remember speeches and lectures in detail
but has a hard time with written text.
Having to read long texts is pointless and
will not be retained by the auditory learner
unless it is read aloud.
d. Activist - Learns by having a go
e. Reflector - Learns most from activities
where they can watch, listen and then
review what has happened.
f. Theorist - Learns most when ideas are
linked to existing theories and concepts.
g. Pragmatist - Learns most from learning
activities that are directly relevant to their
situation.
Other needs a. Financially challenged
b. Working student
c. Solo parent
d. Others(please specify)
___________________________

KING SOLOMON
FORM 1.1 SELF-ASSESSMENT CHECK
INSTRUCTIONS: This Self-Check Instrument will give the trainer necessary

data or information which is essential in planning the
training sessions. Please check the appropriate box of your
answer to the questions below.
Can I? YES NO
Basic Competencies
1. LEAD WORKPLACE COMMUNICATION

Communicate information about workplace processes
Lead workplace discussions
Identify and communicate issues arising in the workplace
2. LEAD SMALL TEAM
Provide team leadership
Assign responsibilities
Set performance expectations for team members
Supervised team performance
3. DEVELOP AND PRACTICE NEGOTIATION SKILLS
Plan negotiations
Participate in negotiations
4. SOLVE PROBLEMS RELATED TO WORK ACTIVITIES
Identify the problem
Determine fundamental causes of the problem
Determine corrective action
Provide recommendation/s to manager

5. USE MATHEMATICAL CONCEPTS AND TECHNIQUES
Identify mathematical tools and techniques to solve problem
Apply mathematical procedure/solution
Analyze results
6. USE RELEVANT TECHNOLOGIES

KING SOLOMON
Study/select appropriate technology
Apply relevant technology
Maintain/enhance relevant technology

Common Competencies
1. APPLY QUALITY STANDARDS
Assess quality of received materials
Assess own work
Engage in quality improvement
2. PERFORM COMPUTER OPERATIONS
Plan and prepare for task to be taken undertaken
Input data into computer
Access information using computer
Produce output/ data using computer system
Use basic functions of a www-browser to locate information
Maintain computer equipment and systems
3. MANAGE OWN PERFORMANCE
Plan for completion of own workload
Maintain quality of performance
Build credibility with customers/clients
Core Competencies
1. JOURNALIZE TRANSACTIONS
Prepare chart of accounts
Analyze documents
Prepare journal entry
2. POST TRANSACTIONS
Prepare ledger
Transfer journal entries
Summarize ledger
3. PREPARE TRIAL BALANCE
List account titles
Transfer balances from the ledger

KING SOLOMON
Summarize trial balance
4. PREPARE FINANCIAL REPORTS
Prepare financial statements
Analyze financial statements
5. REVIEW INTERNAL CONTROL SYSTEM
Check policy compliance
Prepare policy compliance report

KING SOLOMON
Evidences/Proof of Current Competencies (Sample)
Form 1.2: Evidence of Current Competencies acquired related to

Job/Occupation
Means of
Current competencies Proof/Evidence
validating
Basic competency
Communicate information Certificate of Written
about workplace processes Training, Certificate Examination,
of Employment Interview and
Practical
Demonstration
Lead workplace discussions Certificate of Written
Training, Certificate Examination,
Practical
Demonstration
Identify and communicate Certificate of Written
issues arising in the Training, Certificate Examination,
workplace of Employment Interview and
Practical
Demonstration
2. LEAD SMALL TEAM
Provide team leadership Certificate of Written
Practical
Demonstration
Assign responsibilities Certificate of Written
Practical
Demonstration
Set performance expectations Certificate of Written
for team members Training, Certificate Examination,
Practical
Demonstration
Supervised team performance Certificate of Written
KING SOLOMON
Practical
Demonstration
Plan negotiations Certificate of Written
Practical
Demonstration
Participate in negotiations Certificate of Written
Practical
Demonstration
Identify the problem Certificate of Written
Practical
Demonstration
Determine fundamental Certificate of Written
causes of the problem Training, Certificate Examination,
Practical
Demonstration
Determine corrective action Certificate of Written
Practical
Demonstration
Provide recommendation/s Certificate of Written
to manager Training, Certificate Examination,
Practical
Demonstration
Identify mathematical tools Certificate of Written
and techniques to solve Training, Certificate Examination,
problem of Employment Interview and
Practical
Demonstration

KING SOLOMON
Apply mathematical Certificate of Written
procedure/solution Training, Certificate Examination,
Practical
Demonstration
Analyze results Certificate of Written
Practical
Demonstration
Study/select appropriate Certificate of Written
technology Training, Certificate Examination,
Practical
Demonstration
Apply relevant technology Certificate of Written
Practical
Demonstration
Maintain/enhance relevant Certificate of Written
technology Training, Certificate Examination,
Practical
Demonstration
Common Competencies
Assess quality of received Certificate of Written
materials Training, Certificate Examination,
Practical
Demonstration
Assess own work Certificate of Written
Practical
Demonstration
Engage in quality Certificate of Written
improvement Training, Certificate Examination,
Practical

Bookkeeping NC III Date Revised: Page 10 of
July 29, 2019
KING SOLOMON vii
Demonstration
Plan and prepare for task to Certificate of Written
be taken undertaken Training, Certificate Examination,
Practical
Demonstration
Input data into computer Certificate of Written
Practical
Demonstration
Access information using Certificate of Written
computer Training, Certificate Examination,
Practical
Demonstration
Produce output/ data using Certificate of Written
computer system Training, Certificate Examination,
Practical
Demonstration
Use basic functions of a www- Certificate of Written
browser to locate information Training, Certificate Examination,
Practical
Demonstration
Maintain computer equipment Certificate of Written
and systems Training, Certificate Examination,
Practical
Demonstration
Plan for completion of own Certificate of Written
workload Training, Certificate Examination,
Practical
Demonstration
Maintain quality of Certificate of Written
performance Training, Certificate Examination,
Practical

July 29, 2019
KING SOLOMON vii
Demonstration
Build credibility with Certificate of Written
customers/clients Training, Certificate Examination,
Practical
Demonstration
Core Competencies
Prepare chart of accounts Certificate of Written
Practical
Demonstration
Analyze documents Certificate of Written
Practical
Demonstration
Prepare journal entry Certificate of Written
Practical
Demonstration
Prepare ledger Certificate of Written
Practical
Demonstration
Transfer journal entries Certificate of Written
Practical
Demonstration
Summarize ledger Certificate of Written
Practical
Demonstration
List account titles Certificate of Written
July 29, 2019
KING SOLOMON vii
Practical
Demonstration
Transfer balances from the Certificate of Written
ledger Training, Certificate Examination,
Practical
Demonstration
Summarize trial balance Certificate of Written
Practical
Demonstration

July 29, 2019
KING SOLOMON vii
Identifying Training Gaps
From the accomplished Self-Assessment Check (Form 1.1) and the

evidences of current competencies (Form 1.2), the Trainer will be able to
identify what the training needs of the prospective trainee are.
Form 1.3 Summary of Current Competencies Versus Required

Competencies (Sample)
Required Units of Current Training
Competency/Learning Competencies Gaps/Requirement
Outcomes based on s
CBC
Basic competency
Communicate Communicate
information about information about
workplace processes workplace processes
Lead workplace Lead workplace
discussions discussions
Identify and Identify and
communicate issues communicate issues
arising in the workplace arising in the
workplace
2. LEAD SMALL TEAM
Provide team leadership Provide team
leadership
Assign responsibilities Assign responsibilities
Set performance Set performance
expectations for team expectations for team
members members
Supervised team Supervised team
performance performance
Plan negotiations Plan negotiations
Participate in Participate in
negotiations negotiations
Identify the problem Identify the problem

July 29, 2019
KING SOLOMON vii
Determine fundamental Determine
causes of the problem fundamental causes
of the problem
Determine corrective Determine corrective
action action
Provide Provide
recommendation/s to recommendation/s
manager to manager
Identify mathematical Identify mathematical
tools and techniques to tools and techniques
solve problem to solve problem
Apply mathematical Apply mathematical
procedure/solution procedure/solution
Analyze results Analyze results
Study/select appropriate Study/select
technology appropriate
technology
Apply relevant technology Apply relevant
technology
Maintain/enhance Maintain/enhance
relevant technology relevant technology
Common Competencies
Assess quality of received Assess quality of
materials received materials
Assess own work Assess own work
Engage in quality Engage in quality
improvement improvement
Plan and prepare for task Plan and prepare for
to be taken undertaken task to be taken
undertaken
Input data into computer Input data into
computer
Access information using Access information
computer using computer
July 29, 2019
KING SOLOMON vii
Produce output/ data Produce output/ data
using computer system using computer
system
Use basic functions of a Use basic functions of
www-browser to locate a www-browser to
information locate information
Maintain computer Maintain computer
equipment and systems equipment and
systems
Plan for completion of Plan for completion of
own workload own workload
Maintain quality of Maintain quality of
performance performance
Build credibility with Build credibility with
customers/clients customers/clients
Core Competencies
Prepare chart of Prepare chart of
accounts accounts
Analyze documents Analyze documents
Prepare journal entry Prepare journal entry
Prepare ledger Prepare ledger
Transfer journal entries Transfer journal
entries
Summarize ledger Summarize ledger
List account titles List account titles
Transfer balances from Transfer balances
the ledger from the ledger
Summarize trial balance Summarize trial
balance
4. PREPARE FINANCIAL REPORTS

July 29, 2019
KING SOLOMON vii
Prepare financial Prepare financial
statements statements
Analyze financial Analyze financial
statements statements
5. REVIEW INTERNAL CONTROL SYSTEM
Check policy compliance Check policy
compliance
Prepare policy Prepare policy
compliance report compliance report
Using Form No.1.4, convert the Training Gaps into a Training Needs/
Requirements. Refer to the CBC in identifying the Module Title or Unit of
Competency of the training needs identified.

July 29, 2019
KING SOLOMON vii
Form No. 1.4: Training Needs (Sample)
Training Needs Module Title/Module of

Instruction
(Learning Outcomes)
Core Competencies
PREPARE FINANCIAL REPORTS
Prepare financial statements 4.1 Preparing Financial
Reports
Analyze financial statements
REVIEW INTERNAL CONTROL SYSTEM
Check policy compliance 5.1 Reviewing Internal
Control System
Prepare policy compliance report

July 29, 2019
KING SOLOMON vii
SESSION PLAN
Sector : Health, Social and other Community Development Services Sector
Qualification Title : Bookkeeping NC III
Unit of Competency : Prepare Financial Reports
Module Title : Preparing Financial Reports
Learning Outcomes: At the end of the session, trainees must be able to:
LO 1. Prepare financial statements
LO 2. Analyze financial statements
A. INTRODUCTION
This module covers the knowledge, skills, and attitudes in preparing financial reports manually for Single Proprietorship.
B. LEARNING ACTIVITIES
LO1. PREPARE FINANCIAL STATEMENTS

Learning Content Methods Presentation Practice Feedback Resources Time
The trainee will CBLM of
read information The trainee will financial
The trainee compare answers statements 30
Sheet 4.1-1on
Financial Statements Individualized will answer to the answer key for single minu
financial
for Single Proprietorship Learning statements for
self-check 4.1. 4.1-1 Proprietorshi tes
single p.
Proprietorship.
Multimedia The trainee will Answer an Compare Performance 10

Date Developed: Document No. BKK – 001
BOOKKEEPING NC III Date Revised:
July 29, 2019 Page 19 of 250
Preparing Financila Reports Developed by:
EMAY JEAN M.
watch videos on
how to prepare
answers to Checklist 4.1-
financial reports
model 1, Laptop, minu
Presentation and what the oral interview.
responses. Projector/LE tes
elements of
D TV
Financial
Statement are.
The trainee will The trainee
The trainee will
read information will answer 30
Individualized compare answers CBLM on
sheet 4.1-2 on self-check 4.1- Preparing minu
Learning to the answer key Balance Sheet
Preparing Balance 2. tes
Sheet 4.1-2.
Performance
The trainee will
Balance Sheet Criteria
receive 1
The trainee will The trainee checklist,
feedback from hour
observe trainer’s will perform task sheet
the trainer and
Demonstration demonstration on the activity in 4.1-2,
based on the 30
how to prepare task sheet 4.1- performance Worksheet on
minu
Balance Sheet. 2. preparing
criteria tes
Balance
checklist.
sheet.
Income Statement The trainee will The trainee
The trainee will CBLM on
read information will answer 30
Individualized compare answers Preparing
Sheet 4.1-3 on self-check 4.1- minu
Learning to the answer key Income
Preparing Income 3. tes
Statement 4.1-3. Statement
Demonstration The trainee will The trainee The trainee will Calculator, 1
observe trainer’s will perform receive Paper, Pencil, hour
July 29, 2019 Page 20 of 250
EMAY JEAN M.
feedback from
Eraser,
the trainer and
demonstration on the activity in Worksheet on
based on the 30
how to prepare task sheet 4.1- preparing
performance minu
Income Statement. 3. Income
criteria tes
Statement
checklist.
The trainee will
read information The trainee CBLM on
The trainee will
Sheet 4.1-4 on will answer Preparing 30
Individualized compare answers
Preparing self-check 4.1- Statement of minu
Learning to the answer key Changes in
Statement of 4. tes
Changes in 4.1-4. Owner’s Equity
Owner’s Equity
Statement of Changes Calculator,
in owner’s Equity The trainee will
The trainee will Paper, Pencil,
receive 1
observe trainer’s The trainee Eraser,
feedback from hour
demonstration on will perform Worksheet on
the trainer and
Demonstration how to prepare the activity in preparing
based on the 30
Statement of task sheet 4.1- Statement of
performance minu
Changes in 3. Changes in
criteria tes
Owner’s Equity. Owner’s
checklist.
Equity
Statement of Cash Individualized The trainee will The trainee The trainee will CBLM on 30
Flows Learning read information will answer compare answers Preparing minu
Sheet 4.1-5 on Self-check 4.1- Statement of tes
to the answer key
preparing 5. Cash Flows
4.1-5.
Statement of Cash
Flows

July 29, 2019 Page 21 of 250
EMAY JEAN M.
The trainee will
Calculator,
The trainee will receive 1
The trainee Paper, Pencil,
observe trainer’s feedback from hour
will perform Eraser,
demonstration on the trainer and
Demonstration the activity in Worksheet on
how to prepare based on the 30
task sheet 4.1- preparing
Statement of Cash performance minu
5. Statement of
Flows. criteria tes
Cash Flows
checklist.
LO2. ANALYZE FINANCIAL STATEMENTS
Financial Ratios Individualized The trainee will The trainee The trainee will Calculator, 30
Learning read Information will answer Compare Paper, Pencil, minu
sheet 4.2-1on self-check 4.2- answers to the Eraser, tes
Financial Ratios. 2. answer key Worksheet
4.2-1 4.2-2.
Multimedia The trainee will The trainee The trainee will Performance 10
Presentation watch videos on will answer an receive Criteria minu
Financial Ratios oral interview. feedback from Checklist, tes
the trainer Laptop,
based on the Projector/LE
performance D TV
criteria
checklist.
Demonstration The trainee will The trainee The trainee will Performance 1
observe trainer’s will perform receive Criteria hour
demonstration on activity on job feedback from checklist, and
how to prepare sheet 4.2-1 the trainer pencil, ball 30
financial ratios based on the pen, eraser, minu
performance calculator,
July 29, 2019 Page 22 of 250
EMAY JEAN M.
criteria Worksheet on tes
checklist. Financial
ratios
C. ASSESSMENT PLAN
 Written Test on: Correct procedures in
 Preparing financial statements
 Oral Questioning on :
 Analysing Financial Statement
 Preparing Financial Statement
 Demonstration on:
 Preparing financial statements
 Analysing Financial Statement
D. TEACHER’S SELF-REFLECTION OF THE SESSION

 Strengths: Majority of the trainees performed well in the tasks and acquired/learned the required skills on the given time frame.
 Weaknesses: Some of trainees are having a hard time finishing the tasks within the time duration.
 Recommendations: The trainer must take time to check on those slow-pacing trainees. Give them exercises with time limit and
give them techniques on how to do the tasks on time.

July 29, 2019 Page 23 of 250
EMAY JEAN M.
COMPETENCY BASED LEARNING MATERIALS
TRAINERS METHODOLOGY
LEVEL 1
BOOKKEEPING NC III
Sector : Health, Social and other Community Development

Services Sector
Qualification : Bookkeeping NCIII
Unit of competency : Prepare Financial Reports
Module title : Preparing Financial Reports
BOOKKEEPING NC III June 15, 2019 Issued by:
Date Revised:
July 29, 2019 Page 24 of 61
Preparing Financial Developed by:
Reports EMAY JEAN M.
HOW TO USE THIS COMPETENCY-BASED LEARNING
MATERIALS
Welcome to the Module “Preparing Financial Reports”. This module

contains training materials and activities for you to complete.
The unit of competency “Preparing Financial Reports” contains the
knowledge, skills, and attitudes required for Bookkeeping to obtain the
National Certificate (NC) level III.
You are required to go through a series of learning activities in order to
compete each of the learning outcomes of the module. In each learning
outcome there are Information Sheets, Job Sheets, and Operations
Sheets. Do these activities on your own and answer the Self-Check at the
end of each learning activity.
If you have questions, don’t hesitate to ask your trainer for assistance.
Recognition of Prior Learning (RPL)
You have already some basic knowledge and skills covered in this
module because you have been working for some time; and already
completed training in this area.
If you can demonstrate competence to your trainer in a particular skill,
talk to your trainer so you don’t have to undergo the same training again. If
you have qualification or Certificate of Competency from previous trainings
show it to him/her. If the skills you acquired are consistent with and
relevant to this module, they become part of the evidence. You can present
to RPL. If you are not sure about your competence skills, discuss this with
your trainer.
After completing this module, ask your trainer to assess your
competence. Result of your assessment will be recorded in your competency
profile. All learning activities are designed for you to complete at your own
pace.
In this module, you will find the activities for you to complete and
relevant information sheets for each learning outcome. Each learning
outcome may have more than one learning activity.
This module is prepared to help you achieve the required competency, in
receiving and relaying information. This will be the source of information
that will enable you to acquire the knowledge and skills in “Journalizing
Transactions” independently at your own pace with minimum supervision
from your trainer

Date Revised:
July 29, 2019 Page 25 of 61
Table of Contents

Date Revised:
July 29, 2019 Page 26 of 61
BOOKKEEPING NC III
COMPETENCY-BASED LEARNING MATERIALS
List of Competencies
No. Unit of Competency Module Title Code
Journalize Journalizing HCS412301

1.
transactions transactions
HCS412302
2. Post transactions Posting transactions
HCS412303
3. Prepare trial balance Preparing trial balance
Prepare financial Preparing financial

HCS412304
4.
reports reports
Review internal control Reviewing internal

HCS412305
5.
system control system

Date Revised:
July 29, 2019 Page 27 of 61
MODULE CONTENT
UNIT OF COMPETENCY PREPARE FINANCIAL REPORTS
MODULE TITLE PREPARING FINANCIAL REPORTS FOR

SINGLE PROPRIETORSHIP
MODULE DESCRIPTOR: This module covers the knowledge, skills, and

attitudes in preparing financial reports manually for Single Proprietorship.
NOMINAL DURATION: 24 hours
LEARNING OUTCOMES:
At the end of this module you MUST be able to:
 Prepare financial statements
 Analyze financial statements
ASSESSMENT CRITERIA:
 Income statement is prepared in accordance with generally accepted
accounting principles/Philippine Financial Reporting
Standards/Philippine Financial Reporting Standards
 Statement of Changes in Equity is prepared in accordance with
generally accepted accounting principles/Philippine Financial
Reporting Standards/Philippine Financial Reporting Standards
 Balance Sheet is prepared in accordance with generally accepted
 Statement of Cash Flow is prepared in accordance with generally
accepted accounting principles/Philippine Financial Reporting
 Financial Statements are analyzed in accordance with prescribed
format.
 Report on financial analysis is prepared in accordance with industry
requirements.

Date Revised:
July 29, 2019 Page 28 of 61
LEARNING OUTCOME NO. 1
Prepare Financial Statements
Contents:
1. Financial Statements for Single Proprietorship

2. Balance Sheet
3. Income Statement
4. Statement of Changes in Owner’s Equity
5. Statement of Cash Flows
Assessment Criteria
1. Income statement is prepared in accordance with generally accepted

2. Statement of Changes in Equity is prepared in accordance with
generally accepted accounting principles/Philippine Financial
Reporting Standards/Philippine Financial Reporting Standards
3. Balance Sheet is prepared in accordance with generally accepted
4. Statement of Cash Flow is prepared in accordance with generally
Conditions
The participants will have access to:
1. Calculator
2. Paper
3. Learning Materials
4. Pencil
5. Eraser
6. Ruler
7. Worksheet
Assessment Method:
1. Written test
2. Practical/performance test

Date Revised:
July 29, 2019 Page 29 of 61
Learning Experiences
Learning Outcome 1
Prepare Financial Statements
Learning Activities Special Instructions
1. Read information sheet 4.1-1 In this Learning outcome you

should understand and analyze the
accounting standard rules and
procedures by following the
Generally Accepted Accounting
Principles (GAAP), accounting
2.Answer self-check 4.1-1 Compare
equation and proper preparing of
answers with answer key 4.1-1
financial statements with 100%
accuracy.
By doing this, read and understand
the information Sheets and answer
the Self-Checks to ensure your
3. Read information sheet 4.1-2 knowledge in accounting standard
procedures.
Compare your answers to the
Answer Key honestly.
You should be able to attain at least
4. Answer self-check 4.1-2 Compare 80% correct answers in every self-
answers with answer key 4.1-2 check questions before you can
proceed to Task Sheet.
In performing the Task Sheet make
sure that your tools, materials and
equipment are available and in good
condition
5. Perform Task Sheet 4.1-2 Notify your trainer before and after
you perform the tasks.
Be ready for oral question.
6. Evaluate output using

performance criteria checklist
4.1-2.
7. Read information sheet 4.1-3

Date Revised:
July 29, 2019 Page 30 of 61
8. Answer self-check 4.1-3 Compare
9. Perform Task Sheet 4.1-2

4.1-3.


4.1-4.

Date Revised:
July 29, 2019 Page 31 of 61


4.1-5.

Date Revised:
July 29, 2019 Page 32 of 61
Information Sheet 4.1-1:
Financial statements for a sole proprietorship

Learning Objectives:
After reading this INFORMATION SHEET, YOU MUST be able to:
1. Determine the steps in preparing financial statement.
Introduction
A financial report, or financial
statement, is a formal record of a company's
financial transactions. A company's
earnings and losses as well as the value of
its assets and stocks are reported in the
statement. The report is comprised of
several subtopics that describe and define a
company's financial health or weakness.
This is a structured financial representation
of the financial policies of the transactions
undertaken by an enterprise and show the
results of management’s stewardship of the
resources invested to it.
There are 6 complete set of financial statements
1. Statement of Financial Position (Balance Sheet).

2. Statement of financial performance or statement of comprehensive
Income (Income statement).
3. Statement of Statement of changes in Equity (Owner’s, partner’s,
shareholder’s, member’s)
4. Statement of Cash Flows
5. Notes, comprising a summary of significant accounting policies and
other explanatory information.
6. Statement of Financial Position as at the beginning of the earliest
comparative period.

Date Revised:
July 29, 2019 Page 33 of 61
How to prepare Financial Statements?
1. After preparing an adjusted Trial
Balance, prepare an income statement
using information from the revenue and
expense account sections of the trial
balance.
2. Prepare a balance balance sheet made
up of assets, liabilities, and owner’s
equity.
3. Close out your company’s temporary
accounts, which resets the system and
gets it ready for the next accounting
cycle.
Users of Financial Statements

 Investors- determine whether they should invest more, hold or sell
shares.
 Employers – know the stability and profitability; ability of the
enterprise to pay salaries, retirement, remuneration and other
benefits.
 Lenders – determine whether their loans and interest thereon will be
paid when due.
 Suppliers and other trade creditors – determine whether amounts
owing to them will be paid on maturity.
 Customers – long term involvement or dependent on enterprise.
 Government and other agencies – determine taxation policies and as
basis of national income and similar statistics.
 Public – may assist them by providing information about the trends
and recent developments in the prosperity of the enterprise.
ACCOUNTING AS LANGUAGE OF BUSINESS

Date Revised:
July 29, 2019 Page 34 of 61
 Accounting is considered as the language of business because it acts
as the “Bridge of Communication.”
WHEN TO PREPARE FINANCIAL STATEMENT?

The life of the business is divided into equal periods where in at the
end of each period, financial statements are prepared. (Accounting periods) –
called time-period assumption or periodicity concept.
 1 month - financial statements are prepared at the end of every

month (Monthly Basis) - shortest accounting period.
 3 months – prepared at the end of every three months (Quarterly
Basis)
 6 months – prepared at the end of every six months (Semi-annual
Basis)
 12 months – prepared at the end of every twelve months
(Yearly/Annual Basis).
2 ANNUAL ACCOUNTING PERIODS

1. Calendar Year - accounting period will begin on January 1 and ends
on December 31 of the year. Most common and adopted by businesses
because it is the nearest period wherein business entities file their
income tax returns.
2. Fiscal Year – accounting Period will begin on the first day of any
month (except January) and ends on the last day of the twelfth month
completing the one year period.
References:
https://www.myaccountingcourse.com/accounting-cycle/financial-
statement-preparation
https://www.scribd.com/document/332480083/PTS-CBLM?
fbclid=IwAR1DUvSAKtGr3O1fSjtdb21Du9skKrkj2OTwpugEvemqDzyIqqSil0_UJ
P0
Self-Check 4.1-1

Date Revised:
July 29, 2019 Page 35 of 61
Directions: Read and understand the following questions and choose the
best answer. Use a separate sheet for your answers. Compare your answers
with the answers’ key after completing all the items.
1. What is the purpose of financial statements?
A. to provide information about the results of operations
B. to ensure business success
C. to increase customers
D. to educate customers about the enterprise.
2. After preparing a balance sheet, what is the next thing to do?
A. prepare ledger
B. Journalize transactions
C. prepare income statement
D. prepare statement of cash flows
3. After preparing the Statement of cash flows, what is the next thing to
do?
A. prepare Statement of changes in owner’s equity
B. prepare statement of financial performance
C. close temporary accounts
D. close permanent account
4. Which of the following DOES NOT justify why financial statements
need to be accurate.
A. to mitigate errors
B. to build trust
C. to make decision making, planning and forecasting better
D. to generate bigger profit
5. Why do financial statements considered as structured?
A. because it is arranged alphabetically
B. because it is arranged logically
C. because it follows a pattern
D. because it follows a standard

Date Revised:
July 29, 2019 Page 36 of 61
Answers’ key 4.1-1
1. A
2. B
3. C
4. D
5. D

Date Revised:
July 29, 2019 Page 37 of 61
Preparing Balance Sheet
1. Determine the steps in preparing balance sheet.
2. Prepare a balance sheet.
Introduction
Most accounting balance sheets classify a company's assets and

liabilities into distinctive groupings such as Current Assets; Property, Plant,
and Equipment; Current Liabilities; etc. These classifications make
the balance sheet more useful.
Begin preparing your financial report by balancing your company's

financial holdings. The balance sheets in a financial report provide an
overview of what the company currently owns (assets), the amount of debt
owed (liabilities) and the profits it has made that will be paid out to
shareholders (equity).
Sample Balance Sheet:

Date Revised:
July 29, 2019 Page 38 of 61
What comprises the balance sheet?
 Balance Sheet shows the accounting elements or values such as the
ASSETS, LIABILITIES and OWNER’S EQUITY which are considered as
PERMANENT ACCOUNTS.
BASIC ACCOUNTING EQUATION:
ASSETS = LIABILITIES + OWNER’S EQUITY (CAPITAL) – at all times, the
total assets must be equal to the total liabilities plus owner’s equity. The
rule is that “total of the left will always equal to the total of the right.”
EXPANDED ACCOUNTING EQUATION

 ASSETS = LIABILITIES + OWNER’S EQUITY + REVENUE – EXPENSES
– in this case we put the components of income statement along with
the balance sheet components.
References:
P0
https://www.bizfilings.com/toolkit/research-topics/finance/basic-
accounting/preparing-financial statements?
fbclid=IwAR15YuwqqVhPiCTiTii7N4r_snk-
mbMmOfiRfZh45XDwWsCQ4SGMLjRCOnM
Self-Check 4.1-2:
Date Revised:
July 29, 2019 Page 39 of 61
Directions: Read the questions carefully and choose the best answer. Use a
separate sheet for your answers. Compare your answers with the answers’
key after completing all the items.
1. Another name for the balance sheet is_________.

A. Statement Of Operations C. Statement of Cash Flows
B. Statement Of Financial Position D. Statement of Performance
2. The balance sheet heading will specify a
A. Period Of Time C. Period On Time
B. Point In Time D. Point On Tim
3. Which of the following is a category or element of the balance sheet?
A. Expenses C. Liabilities
B. Gains D. Losses
4. Which of the following is an asset account?
A. Accounts Payable C. Unearned Revenue
B. Prepaid Insurance D. Accounts Receivable
5. Which of the following is a contra account?
A. Accumulated Depreciation C. Unearned Revenue
B. Mary Smith, Capital D. Accounts Receivable
6. What is the normal balance for an asset account?
A. Debit B. Credit
7. What is the normal balance for liability accounts?
A. Debit B. Credit
8. What is the normal balance for stockholders' equity and owner's equity
accounts?
A. Debit B. Credit
9. What is the normal balance for contra asset accounts?
A. Debit B. Credit
10. Client Jay pays ABC Co. $1,000 in December for ABC to perform
services for Jay in 45 days. ABC uses the accrual basis of accounting. In
December ABC will debit Cash for $1,000. What will be the other account
involved in the December accounting entry prepared by ABC (and what
type of account is it)?
A. Accounts Receivable (asset)
B. Prepaid Services (asset)
C. Service Revenues (revenue)
D. Unearned Revenues (liability)
Answer Key 4.1-2

Date Revised:
July 29, 2019 Page 40 of 61
1. B
2. B
3. C
4. B
5. A
6. A
7. B
8. B
9. B
10. D
TASK SHEET 4.1-2

Date Revised:
July 29, 2019 Page 41 of 61
Title: Preparing Financial Statements
Performance Objective: Given the procedure on how to prepare Balance

Sheet presented on information sheet 4.1-1A, you should be able to
prepare Balance Sheet in accordance with generally accepted
accounting principles/Philippine Financial Reporting Standards/
Philippine Financial Reporting Standards
Supplies/Materials : Calculator, Ball pen/Pencil, Eraser, Learning

Materials
Equipment : Table and Chairs

SAFEETY PRECAUTIONS: Always observe occupational health &
safety practices. Do not bring liquids inside the venue to avoid your
materials from getting wet.
Steps/Procedure:
1. Use the basic accounting equation to make a balance sheet.
(Assets = Liabilities + Owner’s Equity)
2. Choose the date for the balance sheet (last day of the quarter of
fiscal year).
3. Prepare the Header of the balance sheet.
4. List all current assets.
5. List all non-current assets, also known as long-term assets.
6. Add up the current and non-current assets totals and label this
amount “Total Assets”.
Assessment Method: Demonstration
Performance Criteria Checklist 4.1-2

Date Revised:
July 29, 2019 Page 42 of 61
CRITERIA
YES NO
Did you….
1. prepare worksheet using the prescribed format?
2. prepare Balance Sheet in accordance with
generally accepted accounting
principles/Philippine Financial Reporting
Standards?
3. use four (4) fundamental mathematical operations
effectively?
4. apply reading and comprehension skills in doing
the task?
5. use the basic accounting equation to make a
balance sheet (Assets = Liabilities + Owner’s
Equity)?
6. choose the date for the balance sheet (last day of
the quarter of fiscal year)?
7. prepare the Header of the balance sheet?
8. list all current and non-current assets?
9. add up the current and non-current assets totals
and label this amount “Total Assets”?
Worksheet 4.1-2

Date Revised:
July 29, 2019 Page 43 of 61
COMPANY NAME
BALANCE SHEET
DATE ENDED
ASSETS
Current assets

Noncurrent Assets

TOTAL ASSETS
LIABILITIES AND OWNER'S EQUITY

Current Liabilities

Owner's Equity

TOTAL LIABILITIES AND OWNER'S EQUITY


Date Revised:
July 29, 2019 Page 44 of 61
Preparing Income Statement
1. Determine the steps in preparing income statement.
2. Prepare an income statement.
Introduction
Income statement is also referred to as the profit and loss statement,

P&L, statement of income, and the statement of operations. The income
statement reports the revenues, gains, expenses, losses, net income and
other totals for the period of time shown in the heading of the statement. If a
company's stock is publicly traded, earnings per share must appear on the
face of the income statement.
Financial Statement shows the “results of operartion” of the business for
a given period of time. Sales Revenue or income earned and Cost and
Expenses incurred and Profit or Loss were found in here. It is also called
temporary accounts.
Sample Income Statement:
COMPANY NAME
STATEMENT OF FINANCIAL PERFORMANCE
FOR THE PERIOD ENDED APRIL 30, 2018
SALES ## 141,300.00
SALES DISCOUNT ## (1,014.00)
SALES RETURNS & ## (9,000.00)
ALLOWANCES
NET SALES 131,286.00
LESS: COST OF SALES ## (4,650.00)

GROSS PROFIT 126,636.00
LESS: OPERATING EXPENSES
ADVERTISING 0.00
RENT 20,000.00
SALARIES 55,000.00
UTILITIES 7,500.00
FREIGHT OUT 1,700.00
INSURANCE 999.00
EXPENSE
TOTAL EXPENSES ## (85,199.00)
NET PROFIT 41,437.00
ELEMENTS OF FINANCIAL STATEMENTS

Date Revised:
July 29, 2019 Page 45 of 61
 ASSETS, LIABILITIES AND CAPITAL – these are elements that
measure the financial condition of the business (Balance Sheet).
 INCOME/REVENUES, COST AND EXPENSES – these are elements
that measures financial performance of the business (Income
Statement).
ACCOUNT TITLES
 These are shown in the Balance Sheet (Permanent Accounts)
 ASSETS – resources controlled by the enterprise as a result of past
transactions and events from which future economic benefits are
expected to flow to the enterprise. It is classified into two: Current and
Non-current assets.
CURRENT ASSETS – Refers to all assets that are ‘expected to be realized,

sold or consumed within the enterprise’s normal operating cycle. These are:
1. Cash – account title to describe money, either in paper or coins and

money substitutes like check, postal money orders, bank drafts and
treasury warrants (cash in bank and cash on hand).
2. Cash Equivalents – defines a short term, highly liquid investments
that are readily convertible to known amounts of cash which are
subject to an insignificant risk of changes in values because of
changes in interest rates.
3. Petty Cash Fund – account title for money placed and set aside for
petty or small expenses.
4. Notes Receivable – this is a promissory note that is received by the
business from the costumer arising from the rendering of services,
sale of merchandise, etc..
5. Accounts Receivable – account title for amounts collectible arising
from services rendered to a customer or client on credit or sale of
goods to customer on accounts.
6. Estimated uncollectible Accounts – this is an asset offset or a
contra-asset account. It provides possible losses from uncollected
accounts.
7. Advances to Employees – account title for amounts collectible from
employees for allowing them to make cash advances which are
deductible against their salaries and wages.
8. Inventories – these are assets which are (1) held for sale in the
ordinary course of business (2) in the process of production for such
sale or (3) in the form of materials or supplies to be consumed in the
production processor in the rendering of services. These are: (1)
Merchandise Inventory, end – unsold merchandise at the end of the
accounting period and (2) Supplies Inventory or Unused Supplies – an
account title for cost of stationery and other supplies purchased for
use but are left on hand.

Date Revised:
July 29, 2019 Page 46 of 61
9. Prepaid Expenses – expenses that ae paid in advance but are not yet
included or have not yet expired such as Prepaid Rental, Prepaid
Insurance, Prepaid Interest, Prepaid Advertising etc.
NON-CURRENT ASSETS
– Tangible assets which are held by an enterprise for use in production to
supply goods and services, for rentals to others, or for administrative
purposes, and which are expected to be used during more than one
period such as:
 Land – account title for the site where the building used as office or
store is constructed.
 Building – account title for finished construction owned by the
business where operations and transactions took place.
 Furniture and Fixtures – include chairs, tables, counters, display
cases etc.
 Accumulated depreciation – an asset offset or contra-asset
account. This is called a Valuation account which is shown as a
deduction from the property and equipment.
LIABILITIES
- these are present obligations of the enterprise arising from past events,
the settlement of which is expected to result in an outflow from the
enterprise of resources embodying economic benefits. Classified by PAS
no.1 namely: Current and Non-current Liabilities.
CURRENT LIABILITIES
– are financial obligations of the enterprise which are (a. expected to be
settled in the normal course of operating cycle; b. due to be settled within
one year from the reporting date. These are:
 Accounts Payable – an account title for an obligation of an enterprise
that constitutes an oral or verbal promise to pay.
 Notes Payable (short term) – same as accounts payable in nature but
only the obligation is evidenced by a promissory note which issued by the
enterprise.
 Accrued Expenses – these are expenses incurred by the enterprise but
are not yet paid. Normally occurred when accounting period ended, such
as rent payable, salaries payable, interest payable, taxes payable, etc.
 Unearned Income – this is an account for an income collected or
received in advance but services has not been rendered yet.
NONCURRENT LIABLITIES:
1. Notes Payable (long term) – same nature with that of notes payable
(short term) but only, this requires payment for more than a year.
2. Mortgage payable – a financial obligation of the enterprise which
requires a fixed or tangible property to be pledged as a collateral to
ensure payment.
References:
Date Revised:
July 29, 2019 Page 47 of 61
P0
https://www.bizfilings.com/toolkit/research-topics/finance/basic-
accounting/preparing-financial statements?
fbclid=IwAR15YuwqqVhPiCTiTii7N4r_snk-
mbMmOfiRfZh45XDwWsCQ4SGMLjRCOnM
Self-Check 4.1-3

Date Revised:
July 29, 2019 Page 48 of 61
1. Gross Profit minus Operating Expenses is best defined as

A. Net Income
B. Net Sales
C. Operating Income
2. The income statement heading will specify which of the following?
A. A POINT in Time
B. A PERIOD of Time
C. A SPAN of time
3. A company disposes of equipment that it no longer uses in its business.
The amount received by the company is more than the amount the asset
is carried at in the accounting records. The company will report a(n)
A. Expense C. Loss
B. Gain D. Revenue
4. Net Sales minus the Cost of Goods Sold equals
A. Gross Profit
B. Income From Operations
C. Net Income
5. The combination of Selling Expenses and Administrative Expenses is
referred to as
A. General Expenses
B. Operating Expenses
C. Total Expenses
6. What is defined as sales minus all variable expenses?
A. Contribution Margin
B. Gross Profit
C. Net Income
7. A corporation's net income will cause an increase to which of the
following?
A. Accumulated Other Comprehensive Income
B. Common Stock
C. Retained Earnings
8. Are the notes to the financial statements considered to be an integral
part of the financial statements?
A. Yes B. No
9. Amounts earned by a company in its main operating activities are
A. Revenues B. Gains
10. Where on the income statement will a gain on discontinued operations
be reported?
A. As Part of Revenues B. Near The End
Answers’ Key 4.1-3:

Date Revised:
July 29, 2019 Page 49 of 61
1. C
2. B
3. B
4. A
5. B
6. A
7. C
8. A
9. A
10. B
TASK SHEET 4.1-3

Date Revised:
July 29, 2019 Page 50 of 61
Performance Objective: Given the procedure on how to prepare an
Income Statement presented on information sheet 4.1-1B, you should
be able to prepare Income statement in accordance with generally
Standards/ Philippine Financial Reporting Standards

Materials

Steps/Procedure:
1. List entries under Income according to the given format on your
activity sheet provided by your trainer.
2. List entries under Expenses according to the given format on your
activity sheet provided by your trainer.
3. Get the difference of Income and Expenses to determine whether the
enterprise gain profit or loss.

Date Revised:
July 29, 2019 Page 51 of 61
CRITERIA
YES NO
Did you….
1. prepared worksheet using the prescribed format?
2. prepared income statement in accordance with
generally accepted accounting
Standards?
effectively?
the task?
5. list entries under Income according to the given
format on your activity sheet provided by your
trainer?
6. list entries under Expenses according to the given
format on your activity sheet provided by your
trainer?
7. get the difference of Income and Expenses to
determine whether the enterprise gain profit or
loss?
Worksheet 4.1-3
Date Revised:
July 29, 2019 Page 52 of 61
COMPANY NAME
SALES
SALES DISCOUNT
SALES RETURNS &
ALLOWANCES
NET SALES
LESS: COST OF SALES
GROSS PROFIT
ADVERTISING
RENT
SALARIES
UTILITIES
FREIGHT OUT
INSURANCE EXPENSE
TOTAL EXPENSES
NET PROFIT

Date Revised:
July 29, 2019 Page 53 of 61
Statement of Changes in Owner’s Equity
1. Determine the steps in preparing Statement of Changes in Owner’s
Equity.
2. Prepare a statement of Changes in Owner’s Equity.
Introduction
The statement of owner's equity portrays changes in the capital

balance of a business over a reporting period. The concept is usually applied
to a sole proprietorship, where income earned during the period is added to
the beginning capital balance and owner draws are subtracted.
Owner’s Equity or Capital is the residual interest in the assets of the

enterprise after deducting all its liabilities. It is expressed in the equation
ASSETS less LIABILITIES equals to OWNER’S EQUITY or CAPITAL. It is
INCREASED when there’s PROFIT OR ADDITIONAL CONTRIBUTIONS by the
owner and DECREASED when there’s a LOSS or WITHDRAWAL by the
owner.
Example: “Marilyn Muega, Capital”
 WITHDRAWAL – term given when an owner made a drawing from his
capital.
Example: “Marilyn Muega, Drawing”
 The statement of owner's equity portrays changes in the capital
balance of a business over a reporting period . The concept is
usually applied to a sole proprietorship , where income earned
during the period is added to the beginning capital balance and
owner draws are subtracted. The result is the ending balance in the
capital account.
 The amount of owner's equity is increased by income and owner
contributions. The balance is decreased by losses and owner draws.
Thus, the format of the statement of owner's equity may include the
following line items:
Beginning capital balance

+ Income earned during the period
- Losses incurred during the period
+ Owner contributions during the period
- Owner draws during the period
= Ending capital balance
For example, a business has ₱100,000 of capital at the beginning of a

reporting period. The entity earns ₱15,000 of income, and the owner
Date Revised:
July 29, 2019 Page 54 of 61
withdraws $5,000 from the capital account. The resulting statement of
owner's equity reveals the following information:
₱100,000 Beginning capital balance

+15,000 Income
- 5,000 Draw
= ₱110,000 Ending capital balance

Sample:
COMPANY NAME
STATEMENT OF CHANGES IN OWNERS EQUITY
FOR THE PERIOD ENDED MARCH 31, 2018
NAME, CAPITAL 0
INITIAL INVESTMENT 650,000.00
DRAWINGS (3,500.00)
NET PROFIT (ADD) / NET
LOSS ( DEDUCT) 41,437.00
NAME, CAPITAL DEC 31 687,937.00
INCOME AND EXPENSE SUMMARY

This is a temporary account created at the end of the accounting
period where income and expenses are temporarily closed to this account.
SHOWN IN INCOME STATEMENT (Temporary Account)

 INCOME or REVENUE – refers to the increase in economic benefits
during the accounting period in the form of inflows.
 Increase assets or increased liabilities
 Proceeds from services rendered or sale of merchandise
 Royalty income, rent Income, interest income etc.
1. SALES – refers to the account title for merchandise either in cash or

on account.
2. SALES RETURNS AND ALLOWANCES – this is a reduction from sales
account for goods that were sold but were returned by the buyer for
bad order or not conforming to the order.
3. SALES DISCOUNT – refers to the discounts given to buyers for early
payment of merchandise purchased on account or payment within the
discount terms. (Reduction from sales account).
4. SERVICE INCOME/REVENUE – this is an account used for all types
of income derived from rendering of services. Specific titles are as
follows:

Date Revised:
July 29, 2019 Page 55 of 61
 Professional Income - account title generally used by the
professionals for income earned from the practice of their profession.
(Accounting fees income, legal fees income, dental fees income,
medical fees, income, etc.)
 Rental Income – for income earned for buildings, space or other
properties owned and rented out by the business.
 Interest Income – for income received by the business arising from
an amount of money borrowed by a customer and usually covered by
a promissory note.
 Miscellaneous Income – for income earned by the business which is
not the main line of its activity and could not be clearly classified.
COST AND EXPENSES
Cost (Original Price)

 Cost of sales or Cost of Goods Sold – refers to cost to produce and
sell the merchandise.
 Freight In – refers to transportation cost incurred in buying goods.
 Purchases – the account title for merchandise purchased either in
cash or on account.
 Purchase Returns and Allowances – refers to the cost of
merchandise that were purchased but later returned to the suppliers
for bad orders (reduction to purchases account).
 Purchased Discounts – refers to discount availed for early payment of
merchandise purchased. (Reduction to purchases account).
 Merchandise Inventory, Beginning - inventory at the beginning of
the period (Jan 1) an asset but will become cost at the end of the
period.
Expenses – these are decreases in economic benefits during the accounting
period in the form of outflows.
 Freight Out – refers to transportation expenses of merchandise sold

 Supplies Expense – this represents cost of supplies that were used
and consumed that bears specific titles as office supplies expense,
shop supplies expense, etc.
 Rent Expense – represents the amount paid or incurred for the use of
property, usually premises.
 Repairs and Maintenance – for expenses incurred in repairing or
servicing the buildings, machineries, vehicles, equipment, etc., which
are owned by the business.
 Salaries Expense – for compensation given to employees of the
business. It may be specified as office salaries, salesmen’s salaries,
etc.
 Uncollectible Accounts – for the anticipated loss that the business
may incur arising from uncollectible accounts.

Date Revised:
July 29, 2019 Page 56 of 61
 Depreciation Expense – for the portion of the cost of property and
equipment or fixed assets that has expired based on national and
systematic allocation procedure.
 Taxes and Licenses – for the amount paid for the business permits,
licenses and other government dues (except income tax).
 Utilities Expense – account title for telephone, light and water bills.
 Insurance Expense – account title for the expired portion of the
insurance premium paid.
 Interest Expense – an expense incurred from borrowed money. This
is separately shown as a deduction from profit before finance charges
to arrive at profit.
 Miscellaneous Expense – any amount paid as expense which is not
significant enough to warrant a particular classification.
 Gas and Oil – the account title gasoline, diesoline, lubricants, grease,
fluids, lube oils, etc. for use by company vehicles.
References:
https://www.accountingtools.com/articles/statement-of-owners-
equity.html
Self-Check 4.1-4
Date Revised:
July 29, 2019 Page 57 of 61
1. The resulting amount when total liabilities are subtracted from total
assets is known as
A. owner's equity or net assets
B. net income or net loss
C. total expenses
D. total revenue
2. The net profit or loss for a particular period of time is reported on the
A. Income Statement
B. Balance Sheet
C. Trial Balance
D. Statement of Changes In Owner's Equity
3. The investment of cash into the business results in a/an
A. increase in cash and a decrease in capital
B. increase in cash and an increase in capital
C. decrease in cash and an increase in capital
D. increase in fees earned and an increase in capital
4. The purchase of supplies for cash will result in a/an
B. increase in cash and an increase in supplies
C. increase in supplies and a decrease in cash
D. increase in equipment and an increase in capital
5. Services rendered for cash will result in a/an
B. increase in cash and an increase in fees earned
C. decrease in cash and an increase in fees earned
D. increase in fees earned and an decrease in capital
6. Cash is received from a client for office rental space.
A. cash increases and rental fees earned decreases
B. cash increases and rental fees earned increases
C. cash decreases and capital increases
D. cash decreases and withdrawals increases
7. Which of the following is a formal written promise to pay a definite sum
of money on demand or at a fixed or determinable future date?
A. Account payable
B. Account receivable
C. Note payable
D. Prepaid insurance policy

Date Revised:
July 29, 2019 Page 58 of 61
8. Peter Atli decided to pay himself a salary of $3,000 per month for the
work he performs for his business, a single proprietorship. Each time a
cheque is recorded for $3,000, which account should be increased?
A. Salaries Expense
B. Capital
C. Peter Atli, Withdrawals
D. Owner Salary Expense
9. Which of the following accounts is NOT a liability?

A. Accounts Payable
B. Accounts Receivable
C. Salaries Payable
D. Notes Payable
10. Assets total ₱50,000 and Liabilities total ₱10,000. The equity of the
business must total
A. ₱4,000
B. ₱40,000
C. ₱400
D. ₱40

Date Revised:
July 29, 2019 Page 59 of 61
Answers’ Key 4.1-4:
1. A
2. A
3. B
4. B
5. C
6. B
7. C
8. C
9. B
10. B
TASK SHEET 4.1-4

Date Revised:
July 29, 2019 Page 60 of 61
Performance Objective: Given the procedure on how to prepare

Statement of Changes in Owner’s Equity presented on information sheet
4.1-1C, you should be able to prepare Income statement in accordance
with generally accepted accounting principles/Philippine Financial
Reporting Standards/ Philippine Financial Reporting Standards.

Materials

Steps/Procedure:
1. Calculate retained earnings or the amount of profit a company
earned for a particular time period.
2. Calculate the owner’s equity which consists of contributed
capital (money invested) and retained earnings (historical sum
profits and losses).
3. Add the “Total liabilities” and “Total Owner’s Equity” figures.
These two must be equal.
CRITERIA YES NO
Date Revised:
July 29, 2019 Page 61 of 61
Did you….
2. prepared statement of Changes in Equity in
accordance with generally accepted accounting
Standards?
effectively?
the task?
5. calculate retained earnings or the amount of profit
a company earned for a particular time period?
6. calculate the owner’s equity which consists of
contributed capital (money invested) and retained
earnings (historical sum profits and losses)?
7. add the “Total liabilities” and “Total Owner’s
Equity” figures?
8. balance total liabilities and owner’s equity?
Worksheet 4.1-4
COMPANY NAME
Date Revised:
July 29, 2019 Page 62 of 61

NAME, CAPITAL
INITIAL INVESTMENT
DRAWINGS
NET PROFIT (ADD) / NET LOSS ( DEDUCT)
NAME, CAPITAL DEC 31

Statement of Cash Flows

Date Revised:
July 29, 2019 Page 63 of 61
1. Determine the steps in preparing Statement of Cash Flows.
2. Prepare a statement of Cash Flows.
Introduction
The statement of cash flows, or the cash flow statement, is a financial

statement that summarizes the amount of cash and cash equivalents
entering and leaving a company. The cash flow statement (CFS) measures
how well a company manages its cash position, meaning how well the
company generates cash to pay its debt obligations and fund its operating
expenses. The cash flow statement complements the balance sheet and
income statement and is a mandatory part of a company's financial reports
since 1987.
Basic parts of the Statement of Cash Flows (or Cash Flow Statement):
1. Operating Activities - Cash from operating activities focuses on the

cash inflows and outflows from a company's main business activities
of buying and selling merchandise, providing services, etc.
2. Investing Activities - is an item on the cash flow statement that
reports the aggregate change in a company's cash position resulting
from investment gains or losses and changes resulting from amounts
spent on investments in capital assets, such as plant and equipment.
3. Financing Activities - accounts for inflows and outflows of cash
resulting from debt issuance and financing, the issuance of any new
stock, dividend payments, and any repurchase of existing stock.
References:
P0
https://www.accountingcoach.com/cash-flow-statement/quiz
https://tools.mheducation.ca/college/larson10/student/olc/10fal_mc_02.h
tml
Statement of Cash Flows Sample
COMPANY NAME
STATEMENT OF CASH FLOWS
Date Revised:
July 29, 2019 Page 64 of 61
CASH FLOW FROM OPERATING ACTIVITIES

CASH RECEIVED FROM
COLLECTED ACCOUNT 32,786.00
RETUREND MERCHANDISE 2,000.00
SOLD MERCHANDISE 95,000.00
PAYMENT FOR
BOUGHT SUPPLIES (8,500.00)
PAID FREIGHT (1,700.00)
PAID ACCOUNT (17,150.00)
BOUGHT MERCHANDISE (10,000.00)
PAID SALARIES (35,000.00)
PAID FREIGHT (1,700.00)
BOUGHT MERCHANDISE (4,000.00)
REFUND TO CUSTOMER (9,000.00)
PAID ACCOUNT (8,800.00)
PAID EXPENSES (48,499.00)
NET CASH FLOW FROM OPERATING
ACTIVITIES (14,563.00)
( TO GET NET CF FROM O.A. DEDUCT
PAYMENTS FROM RECEIVED)
CASH FLOW FROM INVESTING ACTIVITIES

PROPERTY, PLANT & EQUIPMENT ( BOUGHT
EQUIPMENT) (27,500.00)
CASH FLOW FROM FINANCING ACTIVITIES

INITIAL INVESTMENT 650,000.00
BORROWINGS 190,000.00
DRAWINGS (3,500.00)
NET CASH FLOW FROM FROM FINANCING
ACTIVITIES 836,500.00
INCREASE / DECREASE IN CASH & CASH

EQUIVALENTS 794,437.00
( OA-IA+FA)
ADD: CASH & CASH EQUIVALENTS, BEG. -

CASH & CASH EQUIVALENTS, DEC 31 794,437.00
( THE BALANCE SHOULD BE THE SAME W/
CASH BAL. IN THE LEDGER)
Self-Check 4.1-5
Date Revised:
July 29, 2019 Page 65 of 61
1. Depreciation Expense.
A. Operating
B. Investing
C. Financing
D. Supplemental
2. Proceeds from the sale of equipment used in the business.
A. Operating
B. Investing
C. Financing
D. Supplemental
3. The Loss on the Sale of Equipment in Question #2.
A. Operating
B. Investing
C. Financing
D. Supplemental
4. Declaration and payment of dividends on company's stock.
A. Operating
B. Investing
C. Financing
D. Supplemental
5. Gain on the Sale of Automobile formerly used in the business.
A. Operating
B. Investing
C. Financing
D. Supplemental
6. The proceeds from the sale of the automobile in Item #5.
A. Operating
B. Investing
C. Financing
D. Supplemental
7. An increase in the balance in a retailer's Merchandise Inventory.
A. Operating
B. Investing
C. Financing
D. Supplemental
8. An increase in the balance in Accounts Payable.
A. Operating
B. Investing
C. Financing
D. Supplemental
9. Retirement of long-term Bonds Payable.

A. Operating
B. Investing
C. Financing
D. Supplemental

Date Revised:
July 29, 2019 Page 66 of 61
10. Purchase of Treasury Stock (company's own stock).
A. Operating
B. Investing
C. Financing
D. Supplemental
11. The purchase of a new delivery truck to be used in the business.
A. Operating
B. Investing
C. Financing
D. Supplemental
12. A decrease in the balance of Accounts Receivable.
A. Operating
B. Investing
C. Financing
D. Supplemental
13. An increase in Bonds Payable (a long-term liability).
A. Operating
B. Investing
C. Financing
D. Supplemental
14. A decrease in the current asset account Prepaid Insurance.
A. Operating
B. Investing
C. Financing
D. Supplemental
15. A decrease in the current liability Income Taxes Payable.
A. Operating
B. Investing
C. Financing
D. Supplemental

Answers’ Key 4.1-5
1. A
2. B

Date Revised:
July 29, 2019 Page 67 of 61
3. A
4. C
5. C
6. B
7. A
8. A
9. C
10. C
11. B
12. A
13. C
14. A
15. A
TASK SHEET 4.1-5


Statement of Cash Flows presented on information sheet 4.1-1D, you
Date Revised:
July 29, 2019 Page 68 of 61
should be able to prepare Income statement in accordance with
generally accepted accounting principles/Philippine Financial Reporting
Standards/ Philippine Financial Reporting Standards.

Materials, accomplished general ledger

Steps/Procedure:
1. Refer to your Cash ledger.
2. Prepare the operating activities section by converting net
income from an accrual basis to a cash basis.
3. Prepare the investing activities section by presenting cash
activity for noncurrent assets.
4. Prepare the financing section by presenting cash activity for
noncurrent liabilities and owner’s equity.
5. Determine the change in cash from the beginning of the period
to the end of the period.
CRITERIA
YES NO
Did you….

Date Revised:
July 29, 2019 Page 69 of 61
2. prepare Statement of Cash Flow in accordance
with generally accepted accounting
Standards?
effectively?
the task?
5. prepare the operating activities section by
converting net income from an accrual basis to a
cash basis?
6. prepare the investing activities section by
presenting cash activity for noncurrent assets?
7. prepare the financing section by presenting cash
activity for noncurrent liabilities and owner’s
equity?
8. determine the change in cash from the beginning
of the period to the end of the period.
Worksheet 4.1-5
COMPANY NAME


Date Revised:
July 29, 2019 Page 70 of 61
CASH RECEIVED FROM

PAYMENT FOR

NET CASH FLOW FROM OPERATING ACTIVITIES
( TO GET NET CF FROM O.A. DEDUCT PAYMENTS FROM RECEIVED)

PROPERTY, PLANT & EQUIPMENT ( BOUGHT EQUIPMENT)

NET CASH FLOW FROM FROM FINANCING ACTIVITIES

INCREASE / DECREASE IN CASH & CASH EQUIVALENTS
( OA-IA+FA)

CASH & CASH EQUIVALENTS, DEC 31
( THE BALANCE SHOULD BE THE SAME W/ CASH BAL. IN THE
LEDGER)

Date Revised:
July 29, 2019 Page 71 of 61
Learning Experiences
Learning Outcome 2
Analyzing Financial Statements
Learning Activities Special Instructions
1. Read information sheet 4.2-2 on In this Learning outcome you

Accounting Equation should understand and analyze the
accounting standard rules and
procedures by following the
Generally Accepted Accounting
Principles (GAAP), accounting
equation and proper preparing of
2. Answer Self-Check 4.2-2 financial statements with 100%
Compare answers with Answer key accuracy.
4.2-2
By doing this, read and understand
the information Sheets and answer
the Self-Checks to ensure your
knowledge in accounting standard
procedures.
3. Perform activities on Task Sheet Compare your answers to the
4.2-2 Answer Key honestly.
You should be able to attain at least
80% correct answers in every self-
check questions before you can
proceed to Task Sheet.
3. Evaluate performance based on In performing the Task Sheet make
performance criteria checklist. sure that your tools, materials and
equipment are available and in good
condition
Notify your trainer before and after
you perform the task.
Be ready for oral question.

Date Revised:
July 29, 2019 Page 72 of 61
LEARNING OUTCOME NO. 2
Analyze Financial Statements
Content
1. Financial Ratios
Assessment Criteria
1. Financial Statements are analyzed in accordance with prescribed
format.
2. Report on financial analysis is prepared in accordance with
industry requirements.
CONDITIONS:
The students/trainees must be provided with the following:

1. Calculator
2. Paper
3. Learning Materials
4. Pencil
5. Eraser
6. Worksheet
7. Ruler
Assessment Method:
1. Written test
2. Practical/performance test
3. Oral questioning

Date Revised:
July 29, 2019 Page 73 of 61
Financial Ratios
1. Determine the importance of Financial Ratios.
2. Differentiate the different kinds of financial ratios.
3. Analyze financial Statements
Introduction
In this Information sheet you will be acquainted with financial ratios
which is an integral part of this qualification. This will help you gain
additional learning in Bookkeeping as needed in your training.
WHAT IS FINANCIAL RATIO?

Accounting ratios, which are also known as financial ratios, are one
part of financial statement analysis. Accounting ratios will often relate one
financial statement amount to another financial statement amount. For
instance, the inventory turnover ratio divides a company's cost of goods
sold for a recent year by the company's average inventory during that year.
Perhaps the most frequently used accounting ratio is the current

ratio, which divides a company's current assets by its current liabilities.
A company's accounting ratios can be compared to the ratios of other

companies in the same industry. An accounting ratio can also be compared
to the company's same ratio in recent periods to see whether the company is
improving or declining.
An accounting ratio compares two line items in a

company's financial statements, namely made up of its income statement,
balance sheet and cash flow statement. These ratios can be used to evaluate
a company's fundamentals and provide information about the performance
of the company over the last quarter or fiscal year
Examples of financial ratios include the following:
 Gross margin
 Operating margin
 Debt-to-equity ratio
 Quick ratio

Date Revised:
July 29, 2019 Page 74 of 61
 Payout ratio
Each of these ratios requires the most recent data in order to be relevant.
REMEMBER:
 Accounting ratios, an important sub-set of financial ratios, are a
group of metrics used to measure the efficiency and profitability of a
company based on its financial reports.
 An accounting ratio compares two line items in a company’s financial
statements, namely made up of its income statement, balance sheet
and cash flow statement.
 These ratios can be used to evaluate a company’s fundamentals and
provide information about the performance of the company over the
last quarter or fiscal year.
Examples of Accounting Ratios
The income statement contains information about company sales,

expenses, and net income. It also provides an overview of earnings per share
and the number of shares outstanding used to calculate it. These are some
of the most popular data points analysts use asses a company’s profitability.
Gross Margin and Operating Margin
Gross profit as a percent of sales is referred to as gross margin. It is

calculated by dividing gross profit by sales. For example, if gross profit is
$80,000 and sales are $100,000, the gross profit margin is 80%. Operating
profit as a percentage of sales is referred to as operating profit margin. It is
calculated by dividing operating profit by sales. For example, if the operating
profit is $60,000 and sales are $100,000, the operating profit margin is
60%.
Debt-to-Equity Ratio
The balance sheet provides accountants with a snapshot of a

company’s capital structure, one of the most important measures of which
is the debt-to-equity (D/E) ratio. It is calculated by dividing debt by equity.
For example, if a company has debt equal to $100,000 and equity equal to
$50,000, the debt-to-equity ratio is 2 to 1.
The Quick Ratio
The quick ratio, also known as the acid-test ratio, is an indicator of a

company’s short-term liquidity and measures a company’s ability to meet its
short-term obligations with its most liquid assets. Because we're only
Date Revised:
July 29, 2019 Page 75 of 61
concerned with the most liquid assets, the ratio excludes inventories from
current assets.
Dividend Payout Ratio
The cash flow statement provides data for ratios dealing with cash.
For example, the payout ratio is the percentage of net income paid out to
investors. Both dividends and share repurchases are considered outlays of
cash and can be found on the cash flow statement. For example, if dividends
are $100,000, share repurchases are $100,000, and income is $400,000,
the payout ratio is calculated by dividing $200,000 by $400,000, which is
50%.
Financial Ratios Based on the Balance Sheet
Financial statement analysis includes financial ratios. Here are three

financial ratios that are based solely on current asset and current liability
amounts appearing on a company's balance sheet:

Date Revised:
July 29, 2019 Page 76 of 61
Ref.
https://www.investopedia.com/terms/a/accounting-ratio.asp
https://www.accountingcoach.com/blog/what-are-accounting-ratios
https://www.accountingcoach.com/financial-ratios/explanation/2
https://www.accountingcoach.com/financial-ratios/quiz
Self- Check 4.2-2

Date Revised:
July 29, 2019 Page 77 of 61
1. Which of the following is not a current asset?
A. Inventory B. Prepaid Insurance

C. Fixtures D. Cash Flow
2. Current asset MINUS current liabilities is the
A. Current Ratio B. Net Worth

C. Working Capital D. Inventory Turnover
3. Current assets DIVIDED BY current liabilities is the
A. Current Ratio B. Net Worth Ratio

C. Working Capital D. Quick Ratio
4. The quick ratio EXCLUDES which of the following?
A. Accounts Receivable B. Inventory

C. Cash D. Working Capital
5. It is calculated by dividing debt by equity.
A. Gross Margin and Operating Margin

B. Debt-to-Equity Ratio
C. The Quick Ratio
D. Dividend Payout Ratio

Date Revised:
July 29, 2019 Page 78 of 61
Answer Key 4.2-2
1. C
2. C
3. A
4. B
5. B

Date Revised:
July 29, 2019 Page 79 of 61
JOB SHEET 4.2-1

Financial Statements presented on information sheet 4.1-1A-D, you
should be able to prepare Income statement in accordance with generally
Standards/ Philippine Financial Reporting Standards.

Materials, accomplished general ledger and journal.
Equipment : Tables and Chairs

SAFEETY PRECAUTIONS: Always observe occupational health & safety
practices. Do not bring liquids inside the venue to avoid your materials
from getting wet.
Steps/Procedure:
1. Prepare Income Statement
2. Prepare Balance Sheet
3. Prepare Statement of Changes in Owner’s Equity
4. Prepare Statement of Cash Flows
5. Analyze Financial Statement using:
a. Working Capital
b. Current Ratio
c. Debt-to-Equity Ratio
d. Gross Margin and Operating Margin
Assessment Method: Demonstration and Oral Interview

Date Revised:
July 29, 2019 Page 80 of 61
CRITERIA
YES NO
Did you….
2. prepare Balance Sheet in accordance with generally

accepted accounting principles/Philippine Financial
Reporting Standards?
generally accepted accounting principles/Philippine
Financial Reporting Standards?
principles/Philippine Financial Reporting Standards?
5. prepare Statement of Cash Flow in accordance with
6. analyze Financial Statements in accordance with
effectively?
8. apply reading and comprehension skills in doing the
task?

Date Revised:
July 29, 2019 Page 81 of 61
Worksheet 4.2-1
COMPANY NAME
BALANCE SHEET
DATE ENDED
ASSETS
Current assets

Noncurrent Assets

TOTAL ASSETS
LIABILITIES AND OWNER'S EQUITY

Current Liabilities

Owner's Equity

TOTAL LIABILITIES AND OWNER'S EQUITY

COMPANY NAME
Date Revised:
July 29, 2019 Page 82 of 61
SALES
SALES DISCOUNT
SALES RETURNS &
ALLOWANCES
NET SALES
LESS: COST OF SALES
GROSS PROFIT
ADVERTISING
RENT
SALARIES
UTILITIES
FREIGHT OUT
INSURANCE EXPENSE
TOTAL EXPENSES
NET PROFIT
COMPANY NAME

NAME, CAPITAL
INITIAL INVESTMENT
DRAWINGS
NET PROFIT (ADD) / NET LOSS ( DEDUCT)
NAME, CAPITAL DEC 31

COMPANY NAME

Date Revised:
July 29, 2019 Page 83 of 61

CASH RECEIVED FROM

PAYMENT FOR

NET CASH FLOW FROM OPERATING ACTIVITIES
( TO GET NET CF FROM O.A. DEDUCT PAYMENTS FROM RECEIVED)

PROPERTY, PLANT & EQUIPMENT ( BOUGHT EQUIPMENT)

NET CASH FLOW FROM FROM FINANCING ACTIVITIES

INCREASE / DECREASE IN CASH & CASH EQUIVALENTS
( OA-IA+FA)

CASH & CASH EQUIVALENTS, DEC 31
( THE BALANCE SHOULD BE THE SAME W/ CASH BAL. IN THE
LEDGER)
Evidence Plan

Date Revised:
July 29, 2019 Page 84 of 61
Competency
standard: BOOKKEEPING NCIII
Unit of
competency: Prepare Financial Reports
Ways in which evidence will be collected:
Demonstration
Oral Interview
Written Tests
The evidence must show that the trainee…
1. prepared financial statements in
accordance to accounting / / /
Standards.
2. performed financial analysis. / / /
3. used the four (4) fundamental
mathematical operations effectively in / /
preparing financial statements.
4. apply reading and comprehension skills / /
in doing the tasks.
5. showcased communication skills in / /
answering questions.
6. prepared financial statements * / / /
7. analyzed financial statements* / / /
8. prepared report on financial analysis* / / /
NOTE: *Critical aspects of competency
Prepared By: Emay Jean M. Pescadero Date:

Checked By: Date:
DEMONSTRATION CHECKLIST

Date Revised:
July 29, 2019 Page 85 of 61
Trainee’s Name:
Trainer’s Name: EMAY JEAN M. PESCADERO
Qualification: BOOKKEEPING NCIII
Date of assessment:
Time of assessment:
Instructions for demonstration
Given the supplies and materials, you are required to prepare Financial Reports
in accordance with the Generally Accepted Principles (GAP)
Materials and equipment:

Pencil, eraser, calculator, arm chair, financial statements worksheet
 to show if evidence is
OBSERVATION demonstrated
During the demonstration of skills, did the

Yes No N/A
trainee:
 prepared financial statements in
accordance to accounting
  
Standards?
 performed financial analysis?   
 used the four (4) fundamental
mathematical operations effectively in   
preparing financial statements.
 prepared financial statements *   
 analyzed financial statements*   
 prepared report on financial analysis*   
The trainee’s demonstration was:
Satisfactory  Not Satisfactory 

Date Revised:
July 29, 2019 Page 86 of 61
TABLE OF SPECIFICATION
# of
Objectives/Content
Knowledge Comprehension Application items/
area/Topics
% of test
Financial Statement
Item #’s
for Single Item # 2,30 5
1,19,24
Proprietorship
Balance Sheet Item #’s

Item # 11 3
3,27
Income Statement Item #’s 4, Items #’s 20, 22,

8
5, 6, 18, 25 23
Statement of
Item #’ 7-
Changes in Owner’s Item # 21 7
10, 28, 29
Equity
Statement of Cash Item #’s

4
Flows 12-14, 26
Financial Ratios Item #’s

3
15-17
TOTAL 23 5 2 30
Written Test

Date Revised:
July 29, 2019 Page 87 of 61
1. The correct sequence in preparing financial statements.

A. Income statement, balance sheet, Cash flows
B. Cash flows, balance sheet, income statement
C. Balance sheet, Income statement, Cash flows
D. Owner’s equity, income statement, balance sheet
2. Financial statements are useful to business owners only. True or
False?
A. True
B. False
C. Partially true
D. Partly false
3. Which of the accounting equations below is correct?
A. Assets = owner’s equity - liabilities
B. Assets = liabilities + Owner’s equity (Capital)
C. Assets = Capital – Loss
D. Assets = Profit + Loss
4. What are the elements of Income statements?
A. Assets and Owner’s Equity
B. Assets, Profit and Loss
C. Assets, liabilities and capital
D. Assets, drawings and profit
5. Which is not considered as an asset?
A. Accounts payable
B. Capital
C. Land
D. Supplies
6. Which is a current liability?
A. Notes payable
B. Accounts payable
C. Mortgage payable
D. Accrued expenses
7. It refers to the increase in economic benefits during the accounting

period in the form of inflows.

Date Revised:
July 29, 2019 Page 88 of 61
A. Profit
B. Loss
C. Income
D. Capital
8. This refers to the account title for merchandise either in cash or on
account.
A. Sales
B. Income
C. Capital
D. Revenue
9. This account refers to the discounts given to buyers for early payment
of merchandise purchased on account or payment within the discount
terms.
A. Sales discount
B. Sales
C. Income
D. Term
10. These are decreases in economic benefits during the accounting
period in the form of outflows.
A. Liabilities
B. Expenses
C. Account payable
D. Notes payable
11. Assets total ₱50,000 and Liabilities total ₱10,000. The equity of the
business must total
A. ₱4,000
B. ₱40,000
C. ₱400
D. ₱40
12. It is a cash that focuses on the cash inflows and outflows from a
company's main business activities of buying and selling
merchandise, providing services, etc.
A. Operating Activities
B. Investing Activities
C. Financing Activities
D. Supplemental
13. An item on the cash flow statement that reports the aggregate
change in a company's cash position resulting from investment gains

Date Revised:
July 29, 2019 Page 89 of 61
or losses and changes resulting from amounts spent on investments
in capital assets, such as plant and equipment.
D. Supplemental
14. Accounts for inflows and outflows of cash resulting from debt
issuance and financing, the issuance of any new stock, dividend
payments, and any repurchase of existing stock.
D. Supplemental
15. It is calculated by dividing debt by equity.
A. Debt-to-Equity Ratio
B. The Quick Ratio
C. Dividend Payout Ratio
D. Working Capital
16. Current asset MINUS current liabilities is the
A. Current Ratio
B. Net Worth
C. Working Capital
D. Inventory Turnover
17. The quick ratio, also known as the acid-test ratio, is an indicator of
a company’s short-term liquidity and measures a company’s ability to
meet its short-term obligations with its most liquid assets. Because
we're only concerned with the most liquid assets, the ratio excludes
inventories from current assets.
A. Debt-to-Equity Ratio
B. The Quick Ratio
C. Dividend Payout Ratio
D. Inventory Turnover
18. Which of the following accounts is NOT a liability?
A. Accounts Payable
B. Accounts Receivable
C. Salaries Payable
D. Notes Payable
19. A broad rule adopted by the accounting profession as a guide in
measuring, recording, and reporting the financial affairs and activities
of a business is known as.

Date Revised:
July 29, 2019 Page 90 of 61
A. an accounting concept
B. an accounting principle
C. the basic accounting equation
D. objectivity principle
20. Keith Manich deposited $5,000 in a bank account he established for
a pet store that he is going to own and operate as KM's Pets.
Recording the deposit will
A. increase an asset, increase a liability
B. decrease an asset, decrease a liability
C. increase an asset, increase owner's equity
D. decrease an asset, decrease owner's equity
21. Better-Cars Selection, a used car dealer, has total assets and
liabilities of $50,000 and $18,000, respectively. The firm constructed a
shelter for its automobiles by promising to pay the building contractor,
upon completion of the building, $500 per month for twenty-four
months. Upon completion, owner's equity will:
A. increase by $12,000
B. remain unchanged
C. decrease by $12,000
D. increase by $500, each month
22. The owner of a computer services business was able to acquire a new
computer, valued at $5,000, by establishing an account with the
computer vendor, Com Pewters Unlimited. There was no down
payment. Recording the transaction will
23. A sole proprietor recorded the payment of an account payable to an
office supplies store. Recording the transaction will
24. This is a structured financial representation of the financial policies of

the transactions undertaken by an enterprise and show the results of
management’s stewardship of the resources invested to it.
A. Balance Sheet

Date Revised:
July 29, 2019 Page 91 of 61
B. Statement of Cash Flows
C. Income Statement
D. Financial Statement
25. This component of financial statement summarizes the revenues and
expenses generated by the company over the entire reporting period.
A. Financial Statement
C. Income Statement
D. Balance Sheet
26. The total amount of money being transferred into and out of a
business, especially as affecting liquidity.
A. Financial Statement
C. Income Statement
D. Balance Sheet
27. A statement of the assets, liabilities, and capital of a business or other
organization at a particular point in time, detailing the balance of
income and expenditure over the preceding period.
A. Statement of Changes in Owner’s Equity
C. Income Statement
D. Balance Sheet
28. It portrays changes in the capital balance of a business over a
reporting period. The concept is usually applied to a sole
proprietorship, where income earned during the period is added to the
beginning capital balance and owner draws are subtracted.
A. Statement of Changes in Owner’s Equity
C. Income Statement
D. Balance Sheet
29. The resulting amount when total liabilities are subtracted from total
assets is known as
A. owner's equity or net assets
B. net income or net loss
C. total expenses
D. total revenue
30. Using the cash basis of accounting a sale is recorded when?

A. When the goods are sent to the customer
B. The sale is made to the customer
C. When the cash is received from the customer
Date Revised:
July 29, 2019 Page 92 of 61
D. When the customer receives the product
Answers’ Key
1. A
2. B
3. B
Date Revised:
July 29, 2019 Page 93 of 61
4. C
5. B
6. B
7. C
8. A
9. A
10. B
11. B
12. A
13. B
14. C
15. A
16. C
17. B
18. B
19. B
20. C
21. B
22. A
23. B
24. D
25. C
26. B
27. D
28. A
29. B
30. C

Date Revised:
July 29, 2019 Page 94 of 61
Performance Test
Specific Instruction for the Trainee:
Qualification BOOKKEEPING NC III
Unit of Competency PREPARE FINANCIAL REPORTS
General Instruction:
Given a pencil, calculator, worksheets and materials for financial

statements, you are required to prepare financial statements within 2 hours
following the standards in preparing financial reports.
SAFEETY PRECAUTIONS: Always observe occupational health & safety
practices. Do not bring liquids inside the venue to avoid your materials from
getting wet.
Specific Instruction:
1. Prepare Income Statement
2. Prepare Balance Sheet
3. Prepare Statement of Changes in Owner’s Equity
4. Prepare Statement of Cash Flows
5. Analyze Financial statements

Date Revised:
July 29, 2019 Page 95 of 61
CRITERIA
YES NO
Did you….
10. prepareBalance Sheet in accordance with generally

accepted accounting principles/Philippine Financial
Reporting Standards?
principles/Philippine Financial Reporting Standards?
13. prepare Statement of Cash Flow in accordance with
14. analyze Financial Statements in accordance with
effectively?
16. apply reading and comprehension skills in doing the
task?

Date Revised:
July 29, 2019 Page 96 of 61
QUESTIONING TOOL
Satisfactory
Questions to probe the trainee’s underpinning knowledge
response
Extension/Reflection Questions Yes No
Q: Why financial statement is important?  
A: Financial statement is important because it allows you to
make strategic decisions that support growth and long-term  
profitability of the enterprise.
Q: How can financial statements keep track of a business’
success?  
A: Financial statements indicate the level of success or

difficulties of business and are crucial to monitoring the
financial and operational performance of a company. It provides  
significant insight into profitability, problem areas, resource
usage and viability.
Safety Questions
Q: What are the possible safety measure when it comes to office  
electrical wirings?
A: Electrical wiring used by the office equipment should be  
checked and to ensure that there will be no leakages.
Q: How to avoid computer equipment into damage & other office  
computer tool?
A: Avoid eating while doing the computer works or while  
handling the computer equipment.
Contingency Questions
 
Q: What if the Daily Record for Cash Flow does not corresponds
with the existing Bank Balance?
A: The bookkeeper should check the Company’s Daily Cash  

position versus to bank record transactions.
Q: What if company’s computer system doesn’t work that could  
possibly affect company’s data.
A: Normally call the company’s authorized Information  
technologist and record all transactions manually while waiting
the system to fix.
Job Role/Environment Questions  
Date Revised:
July 29, 2019 Page 97 of 61
 
Q: What are the possible role of a competent bookkeeper?

A: Normally do the recording and reporting financial
information of a business.
 
Q: How can one employee helps to recycle those used papers?

A: It can be by making those used bond papers into post notes
or envelope for internal company’s transactions.
Rules and Regulations  

Q: What is the role of Generally Accepted Accounting Principles?  
A: It is serves as ground rules that guide accounting  
practitioners in recording and reporting financial information of
a business.
Q: How many Generally Accepted Accounting Principles that  
applicable for use? What are those principles?
A: Nine principles; Cost principle, Objectivity principle,  
Matching principle, Materiality principle, Consistency principle
and Adequate Disclosure principle
The trainee’s underpinning  Satisfactory  Not

knowledge was: Satisfactory
Trainee’s Signature Date:
Trainer’s Signature Date:

Date Revised:
July 29, 2019 Page 98 of 61
Templates for Inventory of Training Resources
Resources for presenting instruction

 Print Resources As per TR As per Remarks
Inventory
Registration Forms 25 pcs
Teacher’s Record Book 1 pc
 Non Print Resources As per TR As per Remarks
Inventory
Computer/Laptop 1 unit 1 unit Complete
Aircon unit 1 unit 1 unit Complete
LCD Projector 1 unit 1 unit Complete
Teacher’s Table/Chair 1 unit 1 unit Complete
Arm Chairs 25 pcs 25 pcs Complete
Stapler 1 pc 1 pc Complete
Staple Wire 1 box 1 box Complete
Marker 3 pcs 2 pcs For replenishment
Acetate 1 box 1 box Complete
Marker Ink 1 pc 1 pc Complete
White Board 1 pc 1 pc Complete
Resources for Skills practice of _____________________________(Qualification

Title and level)_
 Supplies and As per TR As per Remarks
Materials Inventory
Pencils 25 pcs 20 pcs For replenishment
Date Revised:
July 29, 2019 Page 99 of 61
Pencil Erasers 25 pcs 22 pcs For replenishment
Ball pens 25 pcs 23 pcs For replenishment
Ruler 25 pcs 19 pcs For replenishment
Journals (assorted 25 pcs 15 pcs For reproduction
columns)
Ledger 25 pcs 20 pcs For reproduction
Worksheets (assorted) 25 pcs 16 pcs For reproduction
Envelopes ( Long) 25 pcs 25 pcs Complete
 Tools
Calculators 25 pcs 25 pcs Complete
Note: In the remarks section, remarks may include for repair, for
replenishment, for reproduction, for maintenance etc.

Date Revised:
July 29, 2019 Page 100 of 61
CBT Shop-Lay0ut
Learning Quality
Resource Area control area
Institutional Trainer’s
Assessment Resource Area
Area
Contextual Support
Learning area Service Area
Practical Work Area
Training
Computer Activity Distance
Matrix
Laboratory Learning Area
Achievement Progress
Chart Chart
- Fire extinguisher
- Emergency exit
- Exit
Date Revised:
July 29, 2019 Page 101 of 61
- Main Entrance
- Garbage bins (Blue: Biodegradable, Red: Non-biodegradable )

Date Revised:
July 29, 2019 Page 102 of 61

Emay Template Revised

Uploaded by

Copyright:

Available Formats

Emay Template Revised

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Emay Template Revised

Uploaded by

Copyright:

Available Formats

Plan

Date Developed: Document No. BKK - 001

Sample Data Gathering Instrument for Trainee’s

Language, Average grade in: Average grade in:

Cultural and Ethnicity/culture:

Education & Highest Educational Attainment:

Date Developed: Document No. BKK - 001

Previous List down trainings related to your

Special courses Other courses related to your qualification

Learning styles a. Visual - The visual learner takes mental

of activity around him and will focus better

Date Developed: Document No. BKK - 001

INSTRUCTIONS: This Self-Check Instrument will give the trainer necessary

1. LEAD WORKPLACE COMMUNICATION

4. SOLVE PROBLEMS RELATED TO WORK ACTIVITIES

Identify the problem

Determine fundamental causes of the problem

Determine corrective action

Provide recommendation/s to manager

Date Developed: Document No. BKK - 001

Apply relevant technology

Maintain/enhance relevant technology

Date Developed: Document No. BKK - 001

Date Developed: Document No. BKK - 001

Form 1.2: Evidence of Current Competencies acquired related to

Date Developed: Document No. BKK - 001

Date Developed: Document No. BKK - 001

Date Developed: Document No. BKK - 001

Date Developed: Document No. BKK - 001

From the accomplished Self-Assessment Check (Form 1.1) and the

Form 1.3 Summary of Current Competencies Versus Required

Date Developed: Document No. BKK - 001

Date Developed: Document No. BKK - 001

Date Developed: Document No. BKK - 001

Training Needs Module Title/Module of

Date Developed: Document No. BKK - 001

LO1. PREPARE FINANCIAL STATEMENTS

Multimedia The trainee will Answer an Compare Performance 10

Date Developed: Document No. BKK – 001

D. TEACHER’S SELF-REFLECTION OF THE SESSION

Date Developed: Document No. BKK – 001

Sector : Health, Social and other Community Development

Welcome to the Module “Preparing Financial Reports”. This module

Date Developed: Document No. BKK - 001

Date Developed: Document No. BKK - 001

No. Unit of Competency Module Title Code

Journalize Journalizing HCS412301

Prepare financial Preparing financial

Review internal control Reviewing internal

Date Developed: Document No. BKK - 001

UNIT OF COMPETENCY PREPARE FINANCIAL REPORTS

MODULE TITLE PREPARING FINANCIAL REPORTS FOR

MODULE DESCRIPTOR: This module covers the knowledge, skills, and

NOMINAL DURATION: 24 hours

Date Developed: Document No. BKK - 001

1. Financial Statements for Single Proprietorship

1. Income statement is prepared in accordance with generally accepted

The participants will have access to:

Date Developed: Document No. BKK - 001