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    Salvador, Gem D. Module 2 Activity & SAQ

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    Mimi Olshope
    The document discusses the four basic financial statements: the balance sheet, income statement, statement of retained earnings, and statement of cash flows. It describes what each statement contains and why financial statements are necessary for businesses. The balance sheet presents a company's assets, liabilities, and equity at a point in time. Dividends are treated as a reduction in retained earnings, whether paid or not.

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    Salvador, Gem D. Module 2 Activity & SAQ

    Uploaded by

    Mimi Olshope
    50 views2 pages
    The document discusses the four basic financial statements: the balance sheet, income statement, statement of retained earnings, and statement of cash flows. It describes what each statement contains and why financial statements are necessary for businesses. The balance sheet presents a company's assets, liabilities, and equity at a point in time. Dividends are treated as a reduction in retained earnings, whether paid or not.

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    Salvador,Gem D. Module 2 Activity & SAQ

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    The document discusses the four basic financial statements: the balance sheet, income statement, statement of retained earnings, and statement of cash flows. It describes what each statement contains and why financial statements are necessary for businesses. The balance sheet presents a company's assets, liabilities, and equity at a point in time. Dividends are treated as a reduction in retained earnings, whether paid or not.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    50 views2 pages

    Salvador, Gem D. Module 2 Activity & SAQ

    Uploaded by

    Mimi Olshope
    The document discusses the four basic financial statements: the balance sheet, income statement, statement of retained earnings, and statement of cash flows. It describes what each statement contains and why financial statements are necessary for businesses. The balance sheet presents a company's assets, liabilities, and equity at a point in time. Dividends are treated as a reduction in retained earnings, whether paid or not.

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    © All Rights Reserved
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    LESSON 1

    ACTIVITY
    Discussion Question:

    1. What are the basic financial statements?

    - Statement of Financial Position (Balance Sheet)

    -Statement of Comprehensive Income ( Income Statement)

    - Statement of Retained Earnings

    - Statement of Cash Flow

    2. What are the contents of each statement?

    - Statement of Financial Position (Balance Sheet) contains the assets of the firm its liabilities and owners’ equity.

    -Statement of Comprehensive Income ( Income Statement) contains the revenue, expenses, gains, and losses.

    - Statement of Retained Earnings contains the balance adjustments based on changes in net income, cash dividends,
    and stock dividends.

    - Statement of Cash Flow contains the cash from operating activities, cash from investing activities, and cash from
    financing activities.

    3. Why is financial statement necessary for a business firm?

    - Financial statements is necessary for a business firm because to provide information about the results of operations,
    financial position, and cash flows of an organization. They provide information about a company's revenue, expenses,
    profitability, and debt.

    4. Discuss the reason why the balance sheet is often referred to as the statement of financial condition or financial
    position.

    - To present true information about the company's assets, liabilities, and equity. It provides a proof of your assets and
    liabilities and therefore net worth at a single point of time.

    5. How are dividends treated in the statement of retained earnings?

    - Treated as a debit or reduction in the retained earnings account whether they've been paid or not.
    LESSON 2
    Self-Assessment Questions
    1. B
    2. D
    3. C
    4. C
    5. C
    6. D
    7. C
    8. A
    9. B
    10. D

    LESSON 3
    Self-Assessment Questions
      OPERATING INVESTING FINANCING NON CASH
      Inflow Outflow Inflow Outflow Inflow Outflow
    a      500,000  
    b        7,500      
    c           500,000
    d          8,000  
    e          18,000    
    f  16,00            
    0
    g           18,000  
    h   170,000           

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