FUNDAMENTALS OF

SENIOR
ACCOUNTANCY, BUSINESS HIGH
AND MANAGEMENT 2 (FABM 2) SCHOOL
2
Self-
Statement of Comprehensive Learning
Module
Income for Service Business 5

Quarter 1
Fundamentals of Accountancy, Business and Management 2 (FABM2) – Grade 12
Quarter 1 – Self-Learning Module 5: Statement of Comprehensive Income for Service
Business
First Edition, 2020

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FABM2 SENIOR
HIGH
SCHOOL

Self-
Learning
Module 5

Quarter 1

Statement of Comprehensive
Income for Service Business
Introductory Message

For the facilitator:

Welcome to the Fundamentals of Accountancy, Business and Management 2 for

Grade 12 Self-Learning Module on Statement of Comprehensive Income for
Service Business !

This Self-Learning Module was collaboratively designed, developed and

reviewed by educators from the Schools Division Office of Pasig City headed by its
Officer-in-Charge Schools Division Superintendent, Ma. Evalou Concepcion A.
Agustin, in partnership with the City Government of Pasig through its mayor,
Honorable Victor Ma. Regis N. Sotto. The writers utilized the standards set by the K
to 12 Curriculum using the Most Essential Learning Competencies (MELC) in
developing this instructional resource.

This learning material hopes to engage the learners in guided and

independent learning activities at their own pace and time. Further, this also aims
to help learners acquire the needed 21st century skills especially the 5 Cs, namely:
Communication, Collaboration, Creativity, Critical Thinking, and Character 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. Moreover, you are expected to encourage and assist
the learners as they do the tasks included in the module.
For the learner:

Welcome to the Fundamentals of Accountancy, Business and Management 2

Self-Learning Module on Statement of Comprehensive Income for Service 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 material while being an
active learner.

This module has the following parts and corresponding icons:

Expectations - This points to the set of knowledge and skills

that you will learn after completing the module.

Pretest - This measures your prior knowledge about the lesson

at hand.

Recap - This part of the module provides a review of concepts

and skills that you already know about a previous lesson.

Lesson - This section discusses the topic in the module.

Activities - This is a set of activities that you need to perform.

Wrap-Up - This section summarizes the concepts and

application of the lesson.

Valuing - This part integrates a desirable moral value in the

lesson.

Posttest - This measures how much you have learned from the
entire module.
 EXPECTATIONS

After going through this self-learning module, you are expected to:
1. identify the parts of Statement of Comprehensive Income for Service
Business using the single-step approach;
2. prepare a Statement of Comprehensive Income for a service business
using the single-step approach; and
3. reflect on the importance of preparing Statement of Comprehensive
Income for service business.

PRETEST

True or False. Directions: Write the word True if the statement is correct
and False if the statement is wrong.
1. There is one approach in preparing the Statement of
Comprehensive Income which is the Single-step approach.

2. The Single-step approach of the Statement of Comprehensive

Income is called single-step because all revenues are listed down in
one section while all expenses are listed in another.

3. In preparing the Statement of Comprehensive Income, expenses

should be listed first followed by revenue.

4. Net income is computed using a “single-step” which is Total

Revenues plus Total Expenses.

5. The Statement of Comprehensive Income heading includes the

name of the company, the name of the statement, and the date
covered.
 1. RECAP

Directions: Classify the following accounts into Permanent Accounts

or Temporary Accounts. Write PA for Permanent Accounts and TA for
Temporary Accounts.
1. Cash
2. Utility expense
3. Salaries expense
4. Accounts payable
5. Capital
6. Service revenue
7. Rent expense
8. Equipment
9. Depreciation expense
10. Supplies

L E S S ON

Have you experienced working or managing a small business? Please

share your experiences.

How did you feel after earning your income?

How did you compute your income or profit?

Statement of Comprehensive Income for Service Business

The Statement of Comprehensive Income informs the reader about the

performances and activities of the company for a certain period. It generally
contains the revenues and expenses incurred by an entity for the specified
period.

There are two approaches in preparing the Statement of

Comprehensive Income, the Single-step approach and Multi-step approach.
The main difference of the Statements of the two types of business lies on
how they generate their revenues. A service company provides services to
generate revenue and the main cost associated with their service is the cost
of labor which is presented under the account Salaries Expense. In
presenting these items on the Statement of Comprehensive Income, a service
company will separate all revenues and expenses as seen in the single-step
approach.
 The single-step approach of the Statement of Comprehensive Income
is called single-step because all revenues are listed down in one section
while all expenses are listed in another. Net income is computed using a
“single-step” which is Total Revenues minus Total Expenses. (Haddock,
Price, & Farina, 2012 as cited by Monfero et.al. 2016, 23-24) Single-step
SCI is commonly used by service companies.

Name of the Company

Name of the Statement
For the Year Ended mm/dd/yyyy
Service Revenue Php XXX
Expenses:
Salaries Expense XXX
Rent Expense XXX
DepreciationExpense XXX
Utility Expense XXX
MiscellaneousExpens
e XXX
Total Expenses XXX
Net Income Php XXX

Figure 5.1 Pro forma of SCI – Single Step Approach

Preparing the Statement of Comprehensive Income using the Single

Step Approach

1. Prepare the statement heading

ABC Service Center

Statement of Comprehensive Income
For the Year Ended December 31, 2019

Figure 5.2 Heading

The statement heading includes the name of the company, the name of
the statement, and the date covered. The date of the Statement of
Comprehensive Income use “for the” because the amount in the SCI is
temporary, meaning that each period, amount go back to being zero to start
all over.

2. Determine the total revenue from the Trial Balance.

Service Revenue Php 150,000.00

Figure 5.3 Revenue

 This is the total amount of revenue that the company was able to
generate from providing services to customers.

3. List all the expenses and determine the total.

Expenses:
Salaries Expense 45,000.00
Rent Expense 20,000.00
Depreciation Expense 5,000.00
Utility Expense 12,000.00
Miscellaneous Expense 1,500.00

Figure 5.4 Expenses

From the worksheet, list all the expenses and get the total.

4. Determine the effect of other items if there is any, then determine the
net income by deducting the service revenue from total expenses.

ABC Service Center

Statement of Comprehensive Income
For the Year Ended December 31, 2019
Service Revenue Php 150,000.00
Expenses:
Salaries Expense 45,000.00
Rent Expense 20,000.00
Depreciation Expense 5,000.00
Utility Expense 12,000.00
Miscellaneous Expense 1,500.00
Total Expenses 83,500.00
Net Income Php 66,500.00

Figure 5.4 Net Income

The single-step approach uses only one subtraction function to

calculate net income: net income = (revenue + gain) – (expenses + losses).
The result will be Net income for a positive result and net loss for a negative
result.
 ACTIVITIES

I. Practice.
I can solve it! Directions: Solve the following problems and show the
solutions.

1. ABC Company generated revenues amounting to Php 200,000.

Expenses for the year totaled to Php 80,000. How much is the
company’s net income for the year?

2. At the end of the first month of operations for JM’s Service Company,
the business had the following accounts: Cash, Php 30,000; Prepaid
Rent, Php5,000; Equipment, Php 50,000, and Accounts Payable
Php12,000. By the end of the month, Jackson's had earned Php
25,000 of Revenues, Php2,000 of Utility expenses, and Php10,500 of
Salaries Expenses. Calculate the net income to be reported by the
company for the first month.

3. Last September, a computer repair service shop had the following

transactions involving revenues and expenses. Did the firm earn a net
income or incur a net loss for the period? What was the amount?
Paid Php8,500 for rent
Provided services for Php30,500 in cash
Paid Php1,500 for telephone service
Provided services for Php3,900 on credit
Paid salaries of Php 10,000 to employees
Paid Php1,000 for shop cleaning service

II. Keep Practicing

Directions: Below is the Trial Balance of EC Company, a service

business. Prepare the statement of comprehensive income using
Single- Step approach.
 EC COMPANY
Trial Balance
December 31, 2019

Account Name Debit Credit

Cash 193300
Accounts receivable 125000
Prepaid rent 30000
Prepaid insurance 12000
Office supplies 2300
Store supplies 135000
Equipment 160000
Accounts Payable 20000
Notes Payable 90000
EC Capital 290000
EC Drawing 10000
Service Income 325000
Salaries Expense 30000
Commission Expense 24000
Utility Expense 2500
Telephone Expense 900
Total 725000 725000

III. Reflection

Did EC Company earn a net income or incur a net loss for the
period?

Based on the Statement of Comprehensive Income of EC Company,

did the company perform well? What can you recommend to the
EC Company?
 WRAP UP

Let’s wrap up!

 What is the formula for the Single-Step approach? How can you
determine if the result is a net income or a net loss?

 What information is included in the statement heading? Why does the

date of the Statement of Comprehensive Income uses “for the”?

 How are you going to prepare a statement of comprehensive income of

service business?

VALUING

What do you think are the good practices that a Bookkeeper should
value in preparing the Statement of Comprehensive Income for Service
Business? Give at least three good practices and discuss your
answer.

POSTTEST

Directions: Multiple Choice. Encircle the letter of the best answer.

1. Which among the following is an appropriate date for a statement of
comprehensive income?
A. For the period ended December 31, 2019
B. As of December 31, 2019
C. Either a or b
D. Neither a or b
2. Which of the following is an element of statement of comprehensive
income using the Single-Step approach?
A. Capital
B. Cash
C. Service income
D. Drawing

3. Which of the following is the correct formula for a statement of

comprehensive income using the Single-Step approach?
A. Net income =(revenue + gain) – (expenses + losses)
B. Net income = (revenue - gain) + (expenses - losses)
C. Net income = (revenue + gain) – (expenses + losses)
D. net income = (revenue - gain) – (expenses + losses)

4. The following businesses commonly used Single-Step SCI except for

______.
A. Computer repair shop
B. Laundry shop
C. Tutorial center
D. Department store

5. It is the amount earned by a business in its main operating activities.

A. Expenses
B. Revenue
C. Freight in
D. Cost of sales
 KEY TO CORRECTION

10. PA
9. TA
8. PA
7. TA
6. TA
5. b 5. PA 5. True
4. d 4. PA 4. False
3. c 3. TA 3. False
2. c 2. TA 2. True
1. a 1. PA 1. False
Post test Recap Pretest

R E F E R E N CE S

Beticon, J. L., Domingo, JC. D., Yabut, FA. D. 2016. Fundamentals of

Accountancy, Business, and Management 2, Teacher’s Manual.
Quezon City: Vibal Group Inc.
Beticon, J. L., Domingo, JC. D., Yabut, FA. D. 2016. Fundamentals of
Accountancy, Business, and Management 2. Quezon City: Vibal
Group Inc.
Binuya, MVJ. M. 2016. Fundamentals of Accountancy, Business, and
Management Book 2. Manila: JFS Publishing Services.
Dumrique, D. O., Cariño, C.I., Ignacio, R. M. 2014. Accounting MADE EASY.
Rizal: Jenher Publishing House
Monfero, RP. P., Andres, C. S., Salazar, DR. C., Honorario, C. B. Teaching
Guide for Senior High School, Fundamentals of Accountancy, Business,
and Management Book 2. Quezon City: Commission on Higher
Education.
Manuel, Z. V. 2016. 21st Century Accounting Process, International Edition.
Manila: Raintree Traiding and Publishing, Inc.
Salazar, D. R. 2017. Fundamentals of Accountancy, Business, and
Management 2. Manila: Rex Bookstore Inc.
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