Republic of the Philippines

POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

Office of the Vice President for Branches and Campuses
Santa maria bulacan campus
Santa Maria, Bulacan

Name: De Leon, Misha Laine B.

Section: BSA 2-1
Date and Time of Submission: November 29 , 2021 (9:00 PM)

CONCEPTUAL FRAMEWORKS AND ACCOUNTING STANDARDS

ANSWERS TO LESSON MODULES
03 LESSON PAS 1 Presentation of Financial Statements (Part 1)

RESEARCH ANALYSIS
1. Define the statement of financial position
The statement of financial position is another term for the balance sheet. The statement
lists the assets, liabilities, and equity of an organization as of the report date. The information
on the statement of financial position can be used for a number of financial analyses, such as
comparing debt to equity or comparing current assets to current liabilities. It is one of the
financial statements, and so is commonly presented alongside the income statement and
statement of cash flows.

2. Define assets. Give example of current and noncurrent assets

An asset is a resource that has some economic value to a company and can be used in a
current or future period to generate revenues. A company’s resources can be divided into
two categories: current assets and noncurrent assets. The primary determinant between
current and noncurrent assets is the anticipated timeline of their use. Current assets are
assets that are expected to be converted to cash within a year. It includes items such as
accounts receivable and inventory. Noncurrent assets are those that are considered long-
term, where their full value won't be recognized until at least a year. Both fixed assets, such
as PP&E, and intangible assets, like trademarks, fall under noncurrent assets.
 3. Define liability and give example.
Liabilities are legally binding obligations that are payable to another person or entity.
Settlement of a liability can be accomplished through the transfer of money, goods, or
services. A liability is increased in the accounting records with a credit and decreased with a
debit. It also can be considered a source of funds, since an amount owed to a third party is
essentially borrowed cash that can then be used to support the asset base of a business.
Examples of liabilities are: Accounts payable, Accrued liabilities, Deferred revenue, Interest
payable, Notes payable and many more.

4. What are the elements of stockholder’s equity?

The elements of stockholder’s equity are share capital, subscribed share capital,
preference share capital, ordinary share capital, share premium, accumulated profits or
losses, appropriation reserve, revaluation reserve, and treasury shares.

5. What is the purpose of the notes to financial statement?

Notes to the financial statements disclose the detailed assumptions made by
accountants when preparing a company's: income statement, balance sheet, statement of
changes of financial position or statement of retained earnings. The notes are essential to
fully understanding these documents. However, the first four components of financial
statements are insufficient to provide their readers with the clarity required to make financial
and economic decisions. As a result, the notes to financial statements must accompany the
information presented on the face of the financial statements. For instance, if you want to
know the breakdown and movement analysis of the property, plant, and equipment shown
on the balance sheet's face,you refer to the note that is cross-referenced to such asset.

ASSIGNMENT
The statement of financial position shows the entity’s financial condition, give five (5) for each
line items included in assets, liabilities, and stockholder’s equity.

Line Items included in assets are biological assets, inventories, trade and other
receivables, cash and cash equivalents and intangible assets. Line items included in liabilities
are trade and other payables, provisions, financial liabilities, current tax liabilities, deferred tax
liabilities and liabilities included in disposal groups. Line items included in stockholders equity
are outstanding shares, additional paid-in capital, non-controlling interests, issued capital and
reserves attributable to owners of the parent.
I. FORMATIVE ASSESSMENT
Multiple Choices
1. B
2. B
3. C
4. D
5. B
6. A
7. A
8. C
9. D
10. A

REFERENCES:
https://www.iasplus.com/en/standards/is
/ias1