FABM 2 Statement of Comprehensive Income

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Fundamentals of Accountancy, Business and Management 2 – Grade 12
Alternative Delivery Mode
Quarter 1 – Module 3: Statement of Comprehensive Income (SCI) of a Merchandising
Business
First Edition, 2020
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Introductory Message
For the facilitator:
Welcome to the Fundamentals of Accountancy, Business and Management 2 – Grade

12Modular Distance Learning (MDL) Self-Learning Module on the Statement of
Comprehensive Income (SCI) of a Merchandising Business!
This module was collaboratively designed, developed and reviewed by educators from
public institution to assist you, the teacher or facilitator in helping the learners meet
the standards set by the K to 12 Curriculum Most Essential Learning Competencies
(MELCs) in the “New Normal” situation while overcoming their personal, social, and
economic constraints in schooling.
This learning resource hopes to engage the learners into guided and independent
learning activities at their own pace and time. Furthermore, this also aims to help
learners acquire the needed 21st century skills while taking into consideration their
needs and circumstances.
In addition to the material in the main text, you will also see this box in the body of
the module:
Notes to the Teacher

This contains helpful tips or strategies
that will help you in guiding the learners.
As a facilitator, you are expected to orient the learners on how to use this module. You
also need to keep track of the learners' progress while allowing them to manage their
own learning. Furthermore, you are expected to encourage and assist the learners as
they do the tasks included in the module.
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For the learner:
Welcome to the Fundamentals of Accountancy, Business and Management 2 – Grade

12 Modular Distance Learning (MDL) Self-Learning Module on the Statement of
Comprehensive Income (SCI) of a Merchandising Business!
This module was designed to provide you with fun and meaningful opportunities for
guided and independent learning at your own pace and time. You will be enabled to
process the contents of the learning resource while being an active learner.
This module has the following parts and corresponding icons:
What I Need to Know This will give you an idea of the skills or
competencies you are expected to learn in
the module.
What I Know This part includes an activity that aims to

check what you already know about the lesson
to take. If you get all the answers correct
(100%), you may decide to skip this
module.
What’s In This is a brief drill or review to help you link

the current lesson with the previous one.
What’s New In this portion, the new lesson will be

introduced to you in various ways; a story, a
song, a poem, a problem opener, an activity or
a situation.
What is It This section provides a brief discussion of

the lesson. This aims to help you discover
and understand new concepts and skills.
What’s More This comprises activities for independent

practice to solidify your understanding and
skills of the topic. You may check the answers
to the exercises using the Answer
Key at the end of the module.
What I Have Learned This includes questions or blank

sentence/paragraph to be filled into process
what you learned from the lesson.
What I Can Do This section provides an activity which will

help you transfer your new knowledge or
skill into real life situations or concerns.
Assessment This is a task which aims to evaluate your

level of mastery in achieving the learning
competency.
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Additional Activities In this portion, another activity will be given
to you to enrich your knowledge or skill of the
lesson learned.
Answer Key This contains answers to all activities in the

module.
At the end of this module you will also find:
References This is a list of all sources used in

developing this module.
The following are some reminders in using this module:
1. Use the module with care. Do not put unnecessary mark/s on any part of
the module. Use a separate sheet of paper in answering the exercises.
2. Don’t forget to answer What I Know before moving on to the other activities
included in the module.
3. Read the instruction carefully before doing each task.
4. Observe honesty and integrity in doing the tasks and checking your
answers.
5. Finish the task at hand before proceeding to the next.
6. Return this module to your teacher/facilitator once you are through with it.
If you encounter any difficulty in answering the tasks in this module, do not
hesitate to consult your teacher or facilitator. Always bear in mind that you are not
alone.
We hope that through this material, you will experience meaningful learning and
gain deep understanding of the relevant competencies. You can do it!
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What I Need to Know
This module was designed and written with you in mind. It is here to help you master
the preparation of Statement of Comprehensive Income (SCI) of a Merchandising
Business. The scope of this module permits it to be used in many different learning
situations. The language used recognizes the diverse vocabulary level of students. The
lessons are arranged to follow the standard sequence of the course. But the order in
which you read them can be changed to correspond with the textbook you are now
using.
The module is composed of one lesson, namely:

• Lesson 1 – Statement of Comprehensive Income (SCI) of a Merchandising
Business using multistep approach
After going through this module, you are expected to:

1. Identify the elements of the SCI of a merchandising business;
2. Describe the elements of a multistep SCI for a merchandising business;
3. Prepare the SCI of a merchandising business using multi-step approach;
and
4. Reflect on the importance of the preparation of SCI of a merchandising
business using multi-step approach.
1
What I Know
Choose the letter of the best answer. Write the chosen letter on a separate sheet of
paper.
1. Which of the following account is debited when customer return their products
for reasons such as defects, change of preference, etc.?
a. Sales returns c. Purchase Returns
b. Sales Discount d. Purchase Discount
2. Which of the following pertains to the amount of inventory at the beginning of

the accounting period?
a. Cost of goods sold c. Ending inventory
b. Beginning inventory d. Freight in
3. Which of the following best describes general and administrative expenses?

a. Actual cost of merchandise that the company was able to sell
b. Expenses directly related to the main purpose of a merchandising
business
c. Expenses not directly related to the merchandising function of a company
d. Amount of goods bought during the current accounting period
4. Which of the account is normally used to signify the amount of revenue that the
company was able to generate from selling products?
a. Service Revenue c. Selling Expenses
b. Selling Revenue d. Sales
5. Which of the following is the accounting treatment for transportation costs of

merchandise purchased by the company?
a. Freight in and deducted from the net purchases
b. Freight in and added to the amount of net purchases
c. Freight out and treated as selling expenses
d. Freight out and treated as general and administrative expenses
6. Which of the following represents the actual cost of merchandise that the
company was able to sell during the year?
a. Administrative expenses c. Cost of goods sold
b. Cost of goods available for sale d. Selling expenses
7. Which of the following does NOT describes purchase discount?

a. Account used to record early payments by the company to the suppliers
b. This is how buyers see a sales discount given to them by the supplier
c. Deducted from purchases thus classified as contra purchases account
d. This is where discounts given to customers who pay early are recorded
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8. Which of the following is the accounting treatment for ending inventory?
a. Deducted from cost of goods available for sale
b. Added to the cost of goods available for sale
c. Deducted from cost of goods sold
d. Added to the cost of goods sold
9. Which of the following is NOT treated as selling expenses?

a. Salaries of sales agent c. Rent of office building
b. Depreciation of delivery van d. Advertising
10. Which of the following is an example of general and administrative expenses?

a. Cost of merchandise sold during the year
b. Salaries of sales agents
c. Depreciation of warehouse
d. Utilities of home office
Item 11-15: Take the following accounts of VIDIA-19 and Co. for the month of May
2020 to answer the succeeding questions:
Sales P 500,000
Sales returns 30,000
Sales discounts 10,000
Beginning inventory 250,000
Ending inventory 50,000
Purchases 100,000
Purchase returns 20,000
Purchase discounts 10,000
Freight in 15,000
Salaries expense(35% of which is salaries of sales agent) 30,000
Rent expense (for office space is P15,000) 23,000
Depreciation expense, inclusive of P7,000 for office equipment 17,000
Utilities expenses, (the amount for utilities of warehouse is P6,000 11,000
Miscellaneous expense 1,000
11. How much is the Net Sales of VIDIA-19 and Co. for the month of May 2020?
a. P 460,000 c. P 490,000
b. P 470,000 d. P 500,000
12. How much is the Net Purchases of VIDIA-19 and Co. for the month of May
2020?
a. P 85,000 c. P 80,000
b. P 70,000 d. P 90,000
13. How much is the Cost of Goods Sold of VIDIA-19 and Co. for the month of May
2020?
a. P 335,000 c. P 270,000
b. P 250,000 d. P 285,000
14. How much is the total Selling Expenses of VIDIA-19 and Co. for the month of
May 2020?
a. P 34,500 c. P 82,000
b. P 47,500 d. P 33,500
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15. How much is the total General and Administrative Expenses of VIDIA-19 and
Co. for the month of May 2020?
a. P 34,500 c. P 48,500
b. P 47,500 d. P 33,500
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Lesson Statement of Comprehensive

Income (SCI) of a Merchandising
1 Business
Every business entity, especially in this time of COVID-19 pandemic must exert effort
in ensuring that their company remain in the market or at least earn a fair share of
revenue and income. With the help of the Statement of Comprehensive Income (SCI),
a company can determine if it is earning income or not. SCI can also determine if the
earnings for the period has increased or decreased.
Engaging in business is a very risky venture. With increasing number of competition

and some business nowadays can easily enter into the market, one must be certain
that his venture is profitable. More so, one must be knowledgeable on the preparation
of Statement of Comprehensive Income to know if his business is earning or not.
What’s In
In the previous lesson, you have learned the meaning and elements of Statement of
Comprehensive Income (SCI) of a service business as well as its preparation using the
single-step approach. As a review, briefly define the following important terms to
strengthen your knowledge about the SCI before you proceed to this lesson.
1. Statement of Comprehensive Income
2. Temporary or Nominal Accounts
3. Single-step approach
4. Service business
5
What’s New
Below activity will help you understand the elements of the Merchandising business.
Activity 1: Can you spot it?
Directions: Study the Statement of Comprehensive Income (SCI) of ECQ Company.
Identify the elements of SCI using the format below. Write your answers on the answer
sheet.
ECQ COMPANY
STATEMENT OF COMPREHENSIVE INCOME
FOR THE MONTH ENDED MAY 31, 2020
Sales P 600,000
Sales returns P (40,000)
Sales discounts (20,000) (60,000)
Net Sales 540,000
Cost of Goods Sold
Beginning inventory P 250,000
Net Cost of Purchases
Purchases P 120,000
Purchase returns (25,000)
Purchase discount (15,000)
Net Purchases 80,000
Freight in 20,000 100,000
Cost of Goods available for sale 350,000
Ending inventory (60,000) (290,000)
Gross Profit 250,000
Selling Expenses
Salaries expense (20,000)
Rent expense (16,000)
Depreciation expense (14,000)
Utilities expense (12,000) (62,000)
General & Administrative Expenses
Utilities expense (10,000)
Miscellaneous expense (2,000) (92,000)
Net Income P 96,000
1. Net Sales 2. Cost of Goods Sold
3. Selling Expenses 4. General and Administrative Expenses
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What is It
In Activity 1, you were able to identify and define the elements of SCI of a
merchandising business. In this part of the module, you will find out further the
elements of SCI of a merchandising business and how to prepare such using the multi-
step approach.
The SCI of a Merchandising Business

Let’s take a look again at the SCI of ECQ Company. It is an example of a multi-step
approach in preparation of SCI. Now, let us study the different elements of such SCI.
Exhibit 1: Multi-step Statement of Comprehensive Income
ECQ COMPANY
A STATEMENT OF COMPREHENSIVE INCOME
Sales P 600,000
Sales returns B-1 P (40,000)
Sales discounts
NET SALES (20,000) (60,000)
Cost of Goods Sold 540,000
Beginning inventory
Net Cost of Purchases P 250,000
Purchases
Purchase returns B-2 P 120,000
Net Purchases (15,000)
Freight in 80,000
Cost of Goods available for sale 20,000 100,000
(60,000) (290,000)
Selling Expenses
Rent expense B-3 (16,000)
Utilities expense (12,000) (62,000)

Rent expense B- (25,000)

Utilities expense 4 (10,000)
Miscellaneous expense (2,000) (92,000)
Net Income P 96,000
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Explanation of Exhibit 1:
A – Heading
i. Name of the company
ii. Name of the statement
iii. Date of preparation (emphasis on the word “for the” to denote that the
statement is only for that specific period.
B –Elements of SCI
1. Net Sales (Sales less Sales returns and Sales discount)
i. Sales – this is the amount of revenue that the company was able to generate
from selling products
ii. Sales returns – this account is debited in order to record returns of

customers or allowances for such returns.(Haddock, Price, & Farina, 2012)
Sales returns occur when customers return their products for reasons such
as but not limited to defects or change of preference.
iii. Sales discount - this is where discounts given to customers who pay early
are recorded. (Haddock, Price, & Farina, 2012) Also known as cash
discount. This is different from trade discounts which are given when
customers buy in bulk. Sales discount is awarded to customers who pay
earlier or before the deadline.
Notes:
Sales returns and sales discount are called contra revenue account because it is on
the opposite side of the sales account. The sales account is on the credit side
while the reductions to sales accounts are on the debit side. This is
“contrary” to the normal balance of the sales or revenue accounts. (Haddock,
Price, & Farina, 2012)
2. Cost of Goods Sold – this account represents the actual cost of merchandise that
the company was able to sell during the year. (Haddock, Price, & Farina, 2012)
i. Beginning inventory – this is the amount of inventory at the beginning of

the accounting period. This is also the amount of ending inventory from the
previous period.
ii. Net Cost of Purchases (Net Purchases + Freight In)

a. Net Purchases = Purchases – (Purchase discount and purchase
returns)
b. Purchases – amount of goods bought during the current accounting
period
c. Purchase discount – account used to record early payments by the
company to the suppliers of merchandise. (Haddock, Price, & Farina,
2012) This is how buyers see a sales discount given to them by a
supplier.
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d. Purchase returns – account used to record merchandise returned by
the company to their suppliers. (Haddock, Price, & Farina,2012) This is
how buyers see a sales return recorded by their supplier
e. Freight In – this account is used to record transportation costs of
merchandise purchased by the company. (Haddock, Price, & Farina,
2012). It is called freight in because this is recorded when goods are
transported into the company.
iii. Cost of Good available for Sale – add Beginning inventory and Net cost of
Purchases
iv. Ending inventory – amount of inventory presented in the Statement of

Financial Position. This is the total cost of inventory unsold at the end of
the accounting cycle.
Notes:
• Purchase returns and purchase discounts are called Contra Purchases

account that is credited being “contrary” to the normal balance of
Purchases account.
• Gross Profit = Sales less Cost of Goods Sold
• Sales (benta); Cost of Goods Sold (puhunan sa benta)
• Net Purchases does not include Freight-in while Net Cost of Purchases
include Freight-in
3. Selling Expenses – these expenses are those that are directly related to the main
purpose of a merchandising business such as the sale and delivery of merchandise.
However, this does not include cost of goods sold and contra revenue accounts.
(Haddock, Price, & Farina, 2012)
4. General and Administrative Expenses – these expenses are not directly related to
the merchandising function of the company but are necessary for the business
to operate effectively. (Haddock, Price, & Farina, 2012
Notes:
• Gross Profit less General and Administrative Expenses less Selling

Expenses is Net Income for a positive result while Net Loss for a
negative result
• Examples of selling expenses include sales commissions, delivery

expenses, advertising expense
• Examples of general and administrative expenses include utilities and

rent for home office, salaries of admin personnel
9
Simpler SCI:
The above SCI of ECQ Company can be presented in a much simpler form, taking
only the four important elements.
ECQ COMPANY
STATEMENT OF COMPREHENSIVE INCOME
Net Sales P 540,000

Cost of Goods Sold (290,000)
Selling Expenses (62,000)
General and Administrative Expenses (92,000)
Net Income P 96,000
The SCI in the face of the Financial Statement is usually presented in such simpler
form. The schedule of computations for each element is to be presented separately
in the Notes to Financial Statement.

The brief discussion above provided enough information for the
students to do the activities on the succeeding pages. Such activities
are designed for individual preparation and lesser teacher
intervention.
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What’s More
Activity 2: To SELL or Not to SELL?

Directions: Using the following expense accounts of Covidy Store for the year ended
December 31, 2019, identify if it is part of general or administrative expenses or
selling expense.
Expense Account Classification
Activity 3: How MUCH did I sell?
amounts:
Computation:
Sales 150,000
Purchases 20,000
Freight-in 1,000
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Activity 4: Can you PREPARE me now?
Directions: The following are the accounts of Covidy Store for the month of May 2020.
Prepare its Statement of Comprehensive Income for the period using multi- step
approach in a simpler format. Use the activity sheet as your guide for computation
and presentation of the SCI. write your answer on the answer sheet.
Sales P 50,000
Sales returns 3,000
Purchases 10,000
Freight in 1,500
Salaries expense (60% of which is salaries of admin personnel) 3,000
Rent expense, inclusive of P800 for office space 2,300
Depreciation expense, (P1,000 is for office equipment) 1,700
Utilities expenses, (the utilities charged to admin office is P600) 1,100
Miscellaneous expense 100
Net Sales: Cost of Goods Sold:
Selling Expenses: General and Administrative

Expenses:
Statement of Comprehensive Income (Simpler format)
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Activity 5: My Reflection!
Directions: Based on your learnings gained while doing Activity 4, write your
reflection on the importance of the preparing SCI for a merchandising business using
multi-step approach. Write your answer on the answer sheet.
Rubrics for Activity 5: My Reflection!

Score Indicators
3 The importance of preparation of SCI is stated clearly and excellently; the
grammar is correct.
2 The importance of preparation of SCI is stated fairly; there are few errors
in grammar.
1 The importance of preparation of SCI is vaguely stated and grammar is
erroneous.
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What I Have Learned
At this point, let us see how much you have gained from the discussions and
activities you have undergone.
Activity 6: Can you FILL it?
Sales P 600,000
Sales returns (3)
(4) (20,000) (60,000)
NET SALES (5)
Cost of Goods Sold
(6) P 250,000
Net Cost of Purchases
Purchases P 120,000
Purchase returns (25,000)
(7) 80,000
Freight in 20,000 (8)
(9) 350,000
Ending inventory (10) (290,000)
Gross Profit (11)
(12)
Utilities expense (12,000) (13)

Rent expense (14)
Utilities expense (10,000)
(2,000) (92,000)
14
What I Can Do
This activity will help you transfer into real-life situations the knowledge and skills
you have gained or learned from this module.
Activity 7: The BOOKKEEPER in you

Step 1: Identify a merchandising business in your locality. Schedule an appointment
for an interview with the owner, bookkeeper or their sales person in whatever form
convenient for you and them.
a. Ask for the details of the business and fill-out the template below:
Name of the Business:
Business Address:
Owner:
Type of business organization:
Products offered:
b. Inquire on the amount of their daily sales and the effect of COVID-19 on
such sales.
c. Request for a copy of their May 2020 financial statement or statement of

comprehensive income or daily records, if they permit so. If the statement is
not available yet for the specified month, you can ask for the previous months
or years, if any. Remember that any information you get must be consented by
the business owner.
Step 2: Prepare the statement of comprehensive income of the business under study
for the month of May 2020 using multi-step approach.
Notes:
• If the SCI for the period is readily available from the records you obtained, rewrite it using the
format discussed on this module
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• If the records obtained were only for past periods, prepare the SCI for May 2020 using estimates
based on the amounts in the past statement and daily sales you’ve got.
• If there is no record obtained at all, prepare the SCI using hypothetical amounts only.
• Write the SCI using the Activity Sheet below. If you opt to present it using the simpler format,
make sure to include also the computation of each element.
16
Rubrics in Rating Activity 7: The Bookkeeper in you
Score
Case Facts
3 2 1
Business details Filled-out at least Fill-out only 2-3 Listed only one (or
4 needed needed none) needed
information information information
SCI Preparation: Headings is There are few Incorrect headings
Headings correct errors in the or no heading at
headings all
The format and There are few Incorrect format
SCI Preparation:
computation is errors in the and computation
Net sales format and
correct
computation
SCI Preparation:
Cost of Goods format and
correct
Sold computation
SCI Preparation:
Selling Expenses format and
correct
computation
SCI Preparation:
General and format and
correct
administrative computation
expense
The SCI is There few There many
SCI Preparation:
presented in a accounts that are accounts that are
Overall not presented in a not presented in a
correct and
presentation correct and correct and
organized manner
organized manner organized manner
17
Assessment
Directions: Choose the letter of the best answer. Write the chosen letter on a
separate sheet of paper.
1. Which of the account is normally used to signify the amount of revenue that the
company was able to generate from selling products?
a. Service Revenue c. Selling Expenses
b. Selling Revenue d. Sales
2. Which of the following represents the actual cost of merchandise that the
company was able to sell during the year?
a. Administrative expenses c. Cost of goods sold
b. Cost of goods available for sale d. Selling expenses
3. Which of the following best describes general and administrative expenses?

a. Actual cost of merchandise that the company was able to sell
b. Expenses directly related to the main purpose of a merchandising
business
c. Expenses not directly related to the merchandising function of a
company
d. Amount of goods bought during the current accounting period
4. Which of the following is NOT treated as selling expenses?

a. Salaries of sales agent c. Rent of office building
b. Depreciation of delivery van d. Advertising
5. Which of the following is an example of general and administrative expenses?

a. Cost of merchandise sold during the year
b. Salaries of sales agents
c. Depreciation of warehouse
d. Utilities of home office
6. Which of the following account is debited when customer return their products
for reasons such as defects, change of preference, etc.?
c. Sales returns c. Purchase Returns
d. Sales Discount d. Purchase Discount
7. Which of the following pertains to the amount of inventory at the beginning of

the accounting period?
a. Cost of goods sold c. Ending inventory
b. Beginning inventory d. Freight in
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8. Which of the following is the accounting treatment for transportation costs of
merchandise purchased by the company?
a. Freight in and deducted from the net purchases
b. Freight in and added to the amount of net purchases
c. Freight out and treated as selling expenses
d. Freight out and treated as general and administrative expenses
9. Which of the following does NOT describes purchase discount?

a. Account used to record early payments by the company to the suppliers
b. This is how buyers see a sales discount given to them by the supplier
c. Deducted from purchases thus classified as contra purchases account
d. This is where discounts given to customers who pay early are recorded
10. Which of the following is the accounting treatment for ending inventory?
a. Deducted from cost of goods available for sale
b. Added to the cost of goods available for sale
c. Deducted from cost of goods sold
d. Added to the cost of goods sold
Item 11-15: Take the following accounts of Covid Marie Enterprise for the year
ended December 31, 2019 to answer the succeeding questions:
Sales 5,000,000
Sales returns 300,000
Beginning inventory 2,500,000
Purchases 1,000,000
Freight in 150,000
Salaries expense (50% of which is salaries of sales agent) 300,000
Rent expense (for office space is P150,000) 230,000
Depreciation expense, inclusive of P70,000 for office equipment 170,000
Utilities expenses, (the utilities charged for office space is P60,000 110,000
Miscellaneous expense 10,000
11. How much is the Net Sales of Covid Marie Enterprise for the year ended
December 31, 2019?
a. P 4,700,000 c. P 4,600,000
b. P 4,970,000 d. P 5,000,000
12. How much is the Net Cost Purchases of Covid Marie Enterprise for the year
ended December 31, 2019?
a. P 700,000 c. P 900,000
b. P 850,000 d. P 800,000
13. How much is the Cost of Goods Sold of Covid Marie Enterprise for the year
a. P 3,350,000 c. P 2,850,000
b. P 2,500,000 d. P 2,700,000
19
14. How much is the total Selling Expenses of Covid Marie Enterprise for the year
a. P 460,500 c. P 430,000
b. P 420,000 d. P 380,000
15.How much is the total General and Administrative Expenses of Covid Marie
Enterprise for the year ended December 31, 2019?
a. P 440,000 c. P 430,000
b. P 420,000 d. P 380,000
20
Additional Activities
Let us reinforce the skills/knowledge that you have gained from this lesson by doing
the next activity.
Activity 8: Crack the CASE

This activity will help you develop your full ability to answer cases on the computation
and preparation of SCI of a merchandising business. Answer what is being asked in
each case.
Case 1:
Handy Mask Company’s salaries to sales agents amounted to P10,000. Salaries of
accountants amounted to P20,000. No other expenses were incurred. How much is
the company’s general and administrative expense?
Case 2:
Handy Mask’s beginning inventory amounted to P250,000. Net purchases amounted
to P70,000. Freight In totaledP15,000. Compute for the company’s cost of goods
available for sale.
Case 3:
Handy Mask’s Sales amounted to P500,000. Sales returns and sales discounts
amounted to P30,000 and P10,000 respectively. Purchases of the company totaled
P100,000 while purchase returns and purchase discounts amounted to P20,000 and
P10,000 respectively. How much is the company’s Net Sales? Net Purchases?
21
Case 4:
Company’s Cost of Goods sold amounted to P285,000. Net cost of purchases totaled
P85,000. Beginning inventory amounted to P250,000. Sales amounted to P500,000.
Compute for the company’s Ending Inventory.
Case 5:
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Answer Key
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FABM 2 Statement of Comprehensive Income

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FABM 2 Statement of Comprehensive Income

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Published by the Department of Education, Division of Palawan

Development Team of the Module

Printed in the Philippines by

Department of Education – MIMAROPA Region – Schools Division of Palawan

Office Address: PEO Road, Bgy. Bancao-Bancao, Puerto Princesa City

Welcome to the Fundamentals of Accountancy, Business and Management 2 – Grade

Notes to the Teacher

Welcome to the Fundamentals of Accountancy, Business and Management 2 – Grade

This module has the following parts and corresponding icons:

What I Know This part includes an activity that aims to

What’s In This is a brief drill or review to help you link

What’s New In this portion, the new lesson will be

What is It This section provides a brief discussion of

What’s More This comprises activities for independent

What I Have Learned This includes questions or blank

What I Can Do This section provides an activity which will

Assessment This is a task which aims to evaluate your

Answer Key This contains answers to all activities in the

At the end of this module you will also find:

References This is a list of all sources used in

The following are some reminders in using this module:

What I Need to Know

The module is composed of one lesson, namely:

After going through this module, you are expected to:

2. Which of the following pertains to the amount of inventory at the beginning of

3. Which of the following best describes general and administrative expenses?

5. Which of the following is the accounting treatment for transportation costs of

7. Which of the following does NOT describes purchase discount?

9. Which of the following is NOT treated as selling expenses?

10. Which of the following is an example of general and administrative expenses?

Lesson Statement of Comprehensive

Engaging in business is a very risky venture. With increasing number of competition

1. Statement of Comprehensive Income

2. Temporary or Nominal Accounts

1. Net Sales 2. Cost of Goods Sold

3. Selling Expenses 4. General and Administrative Expenses

The SCI of a Merchandising Business

Exhibit 1: Multi-step Statement of Comprehensive Income

General & Administrative Expenses

Rent expense B- (25,000)

ii. Sales returns – this account is debited in order to record returns of

i. Beginning inventory – this is the amount of inventory at the beginning of

ii. Net Cost of Purchases (Net Purchases + Freight In)

iv. Ending inventory – amount of inventory presented in the Statement of

• Purchase returns and purchase discounts are called Contra Purchases

• Gross Profit = Sales less Cost of Goods Sold

• Sales (benta); Cost of Goods Sold (puhunan sa benta)

• Gross Profit less General and Administrative Expenses less Selling

• Examples of selling expenses include sales commissions, delivery

• Examples of general and administrative expenses include utilities and

Net Sales P 540,000

Notes to the Teacher

Activity 2: To SELL or Not to SELL?

Expense Account Classification

Activity 3: How MUCH did I sell?

Net Sales: Cost of Goods Sold:

Selling Expenses: General and Administrative

Statement of Comprehensive Income (Simpler format)

Rubrics for Activity 5: My Reflection!

Notes to the Teacher

What I Have Learned

Activity 6: Can you FILL it?

General & Administrative Expenses