LESSON PLAN IN ABM

Code: Learning Area: THE Grade Level: Quarter: Date:

ABM_FABM11-lllb-c- ACCOUNTING EQUATION 11 1st March 30,2021
17/ABM_FABM11-
lllb-c-18
Learning Competency: 1. Illustrate the Accounting Equation Duration:
(Taken from the 2. Perform operations involving simple cases with the 60 minutes
Curriculum Guide) use of the accounting equation.

Key Concepts/ Understandings to be Developed

I. OBJECTIVES
Knowledge: To identify and know the accounting equation
Skills: To solve simple problems applying the accounting equation.
Attitude: Express appreciation in the use of accounting equation in practical transactions.
Values To learn to relate accounting equation to daily life activities.
II. SUBJECT MATTER
Learning Content – :The Accounting Equation
Learning Resources – : K to 12 Basic Education Curriculum – SHS –Accountancy, Business and Management
( ABM), pages 2-3
Textbooks: Basic Accounting Theory & practices-Ma. Luisa Witty Ramirez Reyes,p 16-21
Materials – : Laptop, Projector, bond paper, pens, board and chalk.
III. PROCEDURES
A. Preliminary Prayer/ Greetings
Activities Checking of Attendance
Setting Classroom Standard

B. Review Ask students their knowledge about accounting concepts and principles.

C. Lesson Activity I
Proper
Take a look on this picture that I have paste in the board. What can you notice or what can
you say about the picture?
A. Motivation

I have here some cut pictures were I got from the internet. What you are going to do is to
put or paste that picture on its proper places inside the stall. I will call some of you to do the
task.

Analysis 1

1. What is the nature of the business then?

2. Who owns these things?
3. Assuming that your parent is the owner of the business, how do think your
parent was able to acquire those things inside the stall?
4. Supposedly that before acquiring some of those things your parent money is
not enough to buy, where do you think your parent gets the money?
5. What can you say about those things or those assets?

B . Presentation: Accounting Equation Overview ( Video Clip)

You have now some ideas about the three major accounts of a financial make up.
Assets, Liabilities and Owner’s Equity. Let me first define these three accounts.
 Assets are a company's resources—things the company owns. Examples of assets
include cash, accounts receivable, inventory, prepaid insurance, investments, land,
buildings and equipment.
Liabilities are a company's obligations—amounts the company owes. Examples of
liabilities include notes or loans payable, accounts payable, salaries and wages payable,
interest payable, and income taxes payable (if the company is a regular corporation).
Liabilities can be viewed in two ways:
(1) as claims by creditors against the company's assets, and
(2) a source—along with owner or stockholder equity—of the company's assets.
Owner's or stockholders' equity also reports the amounts invested into the company by
the owners plus the cumulative net income of the company that has not been withdrawn or
distributed to the owners.
Owner's equity or stockholders' equity is the amount left over after liabilities are
deducted from assets:
Assets - Liabilities = Owner's (or Stockholders') Equity

These three accounts have the same relationship to each other.

We call this relationship the Accounting Equation.

The word equation comes from the word equal. For any equation, one side always equals
another.
The equation shows that assets or properties of the business are owing to outsiders
(Liabilities) and to owner’s (proprietor)
The equation may also be expressed as:

The equation means that out of the properties of the business will first be paid the
debts to outsiders and any amount remaining thereafter should go to the owner.

Activity 2:

1. Using your prior knowledge about financial statement, here are list of assets,
liabilities and owner’s equity. Put them in their proper column. Follow the
format.
Cash Supplies Income
Land Building Expenses
Accounts Payable Salaries Payable Drawing
Capital Notes Receivable Equipment

Asset Liabilities Owner’s Equity

2. What things fall under assets, liabilities and owner’s equity?

3. What did you found out?

Activity 3:

Let us assume that on July 1, 1991 Orlando Reyes engaged in business with a cash
capital investment of P100,000.00. On this date, the accounting equation is:
Assets = Liabilities + Owner’s Equity
Cash = Capital
P100,000.00 = 0 + P100,000.00

The accounting equation could also apply to personal situation. Suppose you buy a
car for P5000, borrow P4,000 from the bank, and pay the rest yourself. Try to illustrate
 the accounting equation.

Assets = Liabilities + Equity

Car = Accounts Payable- + Capital
Bank
P5,000.00 = P4,000.00 + P1,000.00
P5,000.00 = P5,000.00

C. Abstraction Why is assets always equal to liabilities & Owner’s Equity?

D. Application Collaborative Activity

Instruction:
I will group you into three groups. Review the Accounting Equation and examine each of
the transactions and perform necessary operation with the use of Accounting Equation. I
will ask each group to share and explain their solution to the class.

Group 1
Transactions:
1. Jennife deposited P750,000 cash in the bank as her initial capital.
2. After a day, Jennife purchased land amounting to P500,000, 50% paid in cash,
and the other 50% as loan from RCBC bank. Present the accounting equation to
the class showing the amount of assets, liabilities and owner’s equity.
 Group 2:
Transactions:
1. Mayet Reyes purchased P20,000 worth of school supplies on a 15-day term from
National Bookstore
2. After 10 days, she paid 15,000 to her creditor.

Group 3:
Transactions:
1. Mr JP bought furnitures and fixtures for his office worth 30,000 in cash.
2. Paid the following expenses: Salaries P10,000; Rent P5,000; Utilities P4,000
and Miscellanous Expense P2,000

E. Assessment
Individual Activity:
Instruction:
Using the given data accomplish the accounting equation by applying necessary operations.

Assets Liabilities Owner’s Equity

a. 760,00 360,000 ?
0
b. 860,00 ? 592,000
0
c. ? 108,000 760,000
d. 626,60 376,240 ?
0
e. ? 800,000 (100,000)

F. Enrichment
Research the 5 major accounts
Prepared By: Laarni A. Gomez Date : March 30,2021
Subject : FABM 1 Checked By: Mrs. Lera R. Mora
MT 1- Mathematics