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FABM1-11 q3 Mod3 Theaccountingequation v5
FABM1-11 q3 Mod3 Theaccountingequation v5
FABM1-11 q3 Mod3 Theaccountingequation v5
Fundamentals of
Accountancy, Business and
Management 1
Quarter 3 - Module 3:
The Accounting Equation
Fundamentals of Accountancy, Business and Management 1 - Senior High School
Alternative Delivery Mode
Quarter 3 - Module 3: The Accounting Equation
Second Edition, 2021
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Fundamentals of
Accountancy, Business
and Management 1
Quarter 3 - Module 3:
The Accounting Equation
Icons of this Module
Pre-test ---------------------------------------------------------------------- 3
Lesson 4 ---------------------------------------------------------------------- 4
Post-test ---------------------------------------------------------------------- 12
Reference ---------------------------------------------------------------------- 15
What I Need To Know
Good Job! Thank you for completing Module 2. You are now ready for
the next lesson which is The Accounting Equation. You need to learn more
effectively. Good luck!
Module Content
Learning is fun! So enjoy your journey as you unfold the most interesting and
worthwhile activities in accounting.
Perform operations involving simple cases with the use of accounting equation
(ABM_FABM11- IIIb-c-18)
1
General Instructions
7. Remember to review every time you are done answering the activities.
2
What I Know
1.It shows the relationship between a company’s assets, liabilities, and capital.
a. Assets c. Owner’s Equity
b. Liabilities d. Accounting Equation
9.This shows no changes when an owner invests additional cash in the business.
a. Assets c. Owner’s Equity
b. Liabilities d. Accounting Equation
10. This demonstrates the dual aspect of a business transaction and proves
that Debit = Creditl.
a. Assets c. Owner’s Equity
b. Liabilities d. Accounting Equation
3
What’s In
Activity 1. Review
What’s New
Activity 2. Find the missing values. Show your solution for each number.
ASSETS LIABILITIES OWNER’S EQUITY
1 250,000 150,000 100,000
2 665,000 347,000
3 234,000 434,000
4 123,000 23,000
5 876,000 500,000
6 15,000 5,999
7 1,089,021.18 396,156.93
8 68,000 66% of assets
9 1/3 of owner’s equity 143,628
10 164% of liabilities 26,007
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What Is It
The accounting equation formula represents the relationship between the assets,
liabilities, and owner's equity of a business. The value of a company's assets should
always equal the sum of its liabilities and owner's equity. The underlying concept of
this formula is that every asset acquired by a company was financed either through
debt (liability) or through investment from owners (owner’s equity).
Keep reading to have a better understanding of the accounting formula basics, its
elements, and its relationship to one another.
https://www.flickr.com/photos/sampjb/7690679256l
1. Assets - these are economic resources owned by the company expected for future
gain. They are property and rights of value owned by the company.
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Liabilities can include bank loans, credit card accounts,.. or accounts payable (such
as when a supplier offers to.. extend credit to a business).
Let us put into practice the accounting equation above. For example, if Company
Tibs owns Php100,000 in assets but owes Php30,000 to creditors, how much would
be the total claim of the owners?
The equity to which owners/investors have a claim is Php70,000. As you can see,
the accounting formula is all about balance. Any activity on the right side is reflected
on the left side.
1. Given liabilities of Php10,000 and the owner’s equity of Php50,000, find the value
of the assets.
2. Given assets of Php100,000 and the owner’s equity of Php70,000, find the
liabilities.
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3. Given assets of Php200,000 and liabilities of Php90,000, find the owner’s equity.
The accounting equation shows that for every debit, there must be an equal credit.
As we have already discussed, Assets, Liabilities and Owner’s Equity are the three
components of the accounting equation that make up a company’s balance sheet.
Accounting Equation demonstrates the dual aspect of a business transaction and
proves that Debit = Credit. Here is a table to show you the effects of transactions on
the accounting equation.
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The following details will include the amount and the account affected in
illustrating the effects on the accounting equation. Notice that the accounting
equation is always balanced in every transaction such that assets are always equal to
liabilities and owner’s equity.
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What’s More
9
Organization & Unsatisfactory Needs Satisfactory Outstanding
Structure Improvement
- Organization - Structure is -Structure of the
and structure - Structure of the mostly clear and paper is clear
detract from the paper is not easy to follow. and easy to
message. easy to follow. - Transitions are follow.
- Writing is - Transitions present. - Transitions are
disjointed and need - Conclusion is logical and
lacks transition improvement. logical. maintain the
of thoughts. - Conclusion is flow of thought
missing, or if throughout the
provided, does paper.
not flow from the - Conclusion is
body of the logical and flows
paper. from the body of
the paper.
Grammar, Unsatisfactory Needs Satisfactory Outstanding
Punctuation & Improvement
Spelling - Paper contains - Rules of - Rules of
numerous - Paper contains grammar, grammar,
grammatical, few usage, and usage, and
punctuation, and grammatical, punctuation are punctuation are
spelling errors. punctuation and followed with followed;
spelling errors. minor errors. spelling is
Spelling is correct.
correct.
On August 21, 2020, Don JPacs opens Pacs Laundry Services. On the
transaction summary table below, indicate the effect of each transaction to each
account. Put “+” to signify increase or “-” to signify decrease. Indicate the amount of
increase or decrease for each account. The first one is done for you.
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What I Have Learned
Reflective Question: Write your answer on the lines provided below. Refer to
the Rubrics provided in Activity 3.
How can you apply the Accounting Equation to your daily transactions as a
student and as a consumer? What are some examples of these transactions?
What I Can Do
Applying the Accounting Equation to your daily life as a student and consumer, write
your transactions made on a day to day basis and analyse the effects of each
transaction to the different accounting accounts.
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Self-Check!
Great job! You have completed Module 3 successfully! Before going to the next
lesson, check the icon that best shows your learning experience.
If you checked the first icon, you are ready for module 4. If you have checked the
second icon, you need to review the things that you need to relearn. If you have
checked the third icon, it would be best if you read more and ask help from your
teacher, parents or peers in clarifying the lessons that you find it difficult. Be honest
so that you will truly improve.
Assessment
Let us check how much you learned from this module’s coverage.
Directions: Choose the corresponding answer from the word box and write it on the
space provided before each number.
Assets Decrease
Increase No Changes
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_______________ 1.This refers to the obligations to pay and debts of a company.
_______________ 5. This refers to the property and rights owned by the business..
CONGRATULATIONS
FOR COMPLETING THIS MODULE!
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Post-test
1. Liabilities 6. Owner’s Equity
2. Assets 7. Liabilities
3. Accounting Equation 8. Assets
4. Accounting Equation 9. Accounting Equation
5. Assets 10. Liabilities
Activity 4.
1. Bonus
2. Assets + 2,000 and Owner’s Equity + 2,000
3. Assets + 50,000 and Liabilities + 50,000
4. Assets + 5,000 and Owner’s Equity + 5,000
5. Assets + 10,000 and Owner’s Equity + 10,000
Activity 3.
1. Assets = Liabilities + Owner’s Equity
2. Assets are the economic resources owned by the company
expected for future gain. Liabilities include debts, obligations to pay,
and claims of the creditors on the assets of the company. Owner’s
Equity are the investments of the owner plus or minus the results of
business operations.
Activity 2.
1. Bonus 6. 9,001
2. 318,000 7. 692,864.25
3. 668,000 8. 23,120
4. 100,000 9. 191,504
5. 376,000 10. 16.644.48
Pre-test
1. D 6. B
2. A 7. D
3. A 8. A
4. C 9. B
5. B 10. D
Answer Key
References
BOOKS
Skousen, K. Fred, Earl Stice, and James Stice. 2000. Intermediate Accounting. 14th
ed. Vol. 1. Singapore: Thomson Learning Asia.
WEBSITES
“Teacher Sheila’s Lessons Portal: FABM-1.” n.d. Teacher Sheila’s Lessons Portal.
Accessed August 2, 2020. https://bit.ly/303Kp8Y.
Carlson, Rosemary. n.d. “What Is the Accounting Formula?” The Balance Small
Business. Accessed August 2, 2020. https://bit.ly/2X3giwC.
OTHERS
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