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