Scribd
Upload
40 views3 pages

Acc2 Q1W2

The document is a learning kit that provides an overview, objectives, and content about the Statement of Comprehensive Income (SCI). It defines the SCI as a financial statement that presents the success or failure of a business in terms of profitability, with revenues and expenses as its elements. It describes revenues as increases in assets or reductions in liabilities from business operations, while expenses are decreases in assets or additions to liabilities. It also distinguishes between the revenue and expense accounts of service and merchandising businesses. The learning kit aims to help students understand the nature and elements of the SCI.

Uploaded by

Asahi Hamada
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
40 views3 pages

Acc2 Q1W2

The document is a learning kit that provides an overview, objectives, and content about the Statement of Comprehensive Income (SCI). It defines the SCI as a financial statement that presents the success or failure of a business in terms of profitability, with revenues and expenses as its elements. It describes revenues as increases in assets or reductions in liabilities from business operations, while expenses are decreases in assets or additions to liabilities. It also distinguishes between the revenue and expense accounts of service and merchandising businesses. The learning kit aims to help students understand the nature and elements of the SCI.

Uploaded by

Asahi Hamada
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

MONTESSORI DE SAN ILDEFONSO, INC.

Fostering Excellence through Globalized Education


Quijano St., San Juan, San Ildefonso, Bulacan
Tel. / Fax (044) 797- 0543 Email Add: [email protected]

LEARNING KIT

I. TITLE
 Subject: Fundamentals of Accounting, Business and Management 2
 Time Frame: 2 Days (Week 2 / Quarter 1)
 Topic: Statement of Comprehensive Income (SCI)
 Grade Level: 12 ABM

II. OVERVIEW
Comprehensive income provides a holistic view of a company's income not fully captured on the
income statement. Comprehensive income includes net income and unrealized income, such as unrealized
gains or losses on hedge/derivative financial instruments and foreign currency transaction gains or losses.
This Learning Kit will give you the basic information about statement of comprehensive income and its
elements. This will also help you to understand the nature of SCI.

III OBJECTIVE:
At the end of the lesson, the students should be able to:
 Define Statement of Comprehensive Income (SCI)
 Identify the elements of the SCI
 Describe each element of the SCI for a service business and a merchandising business

IV CONTENT

A. Let’s Get Involved

Observe the images above then explain its connection with each other briefly.
https://www.elmens.com/featured/creating-better-engagement-the-million-dollar-idea-for-marketers/
https://stockanalysis.com/articles/financial-metrics/
https://bloom.co/blog/built-on-bloom--how-sendput-makes-employee-expense-reimbursements-instant-with-bloom-
protocol/

B. Let’s Explore
Do you believe that an entrepreneur can see the true picture of his/her operations through the SCI?
Explain how.

C. Let’s Clarify Things.

Definition and Elements of the Statement of Comprehensive Income

The SCI is a financial statement that presents the success or failure of business operations of a company
for a given period, in terms of profitability. Its elements are revenues and expenses.
Revenues refers to economic benefits that flows to the business in the form of increases in assets. It is
also a reduction in liabilities resulting from the business operation. Thus, the owner’s equity increases out of
revenues, aside from contributions of owners. For instance, a service business earns income when it renders
service to its customers who pays in cash.
Contrary to the nature of revenue, expense pertains to a decrease in economic benefits of the business
due to reduction in assets or addition to liabilities resulting from the business operations. Hence, the owner’s
equity decreases as an effect to expenses, aside from withdrawals of the owner. An example is reduction in cash
due to payment for the salaries of employees of the business.
Unlike a service business, a merchandising business has to purchase merchandise that it will resell to
earn revenues. Thus, revenue account of a merchandising business is sales and it has cost of sales aside from
expenses. As in the service business, the revenue concept remains the same, i.e., there is an increase in asset in
the form of cash, accounts receivable, or notes receivable. On the other hand, expense and cost show a decrease
in cash on the date the expense or cost is incurred, for cash terms; or on a future date, for credit terms.

Nominal Accounts – Revenues and Expenses


Nominal Accounts are termed as such because these are temporary accounts containing the revenues
and expenses of the business during an accounting period. An accounting period is a time period such as a
month, a quarter, a semester, or a year that is covered by the report. Balances of revenues and expenses are used
to determine the net income (loss) of the business during an accounting period. Thus, their balances are not
forwarded to the next accounting period. The net income or loss is closed to the owner’s equity account at the
end of an accounting period.
Booked under revenue accounts are the earnings of the business from sales of products or rendering of
services to clients. The typical revenue accounts are the following:
a. Sales – pertain to the sale of goods, on cash or credit terms, of a merchandising business.
b. Service income – refers to earnings of a service business from services rendered to its clients on cash or
credit terms.
c. Professional fees – are earnings derived by a professional or a professional servicing entity, which may
be on cash or credit terms.
d. Interest income – includes the yield on promissory notes, which can be received in cash or may be
collected on a future date.
e. Rent income – represent the earnings of the owner or lessor from his/her property or facility received or
collected from the occupant, called the tenant or lessee.
f. Gain on sale of assets – refers to income obtained from the sale of old, retired, or replaced assets, such
as equipment, investments in shares of stocks, and land.
After familiarizing yourself with the revenue accounts, you may focus on the expenses. Expenses consist
of cost sales, supplies expense, salaries and wages, insurance, and taxes and licenses, among others. There are
also estimated like doubtful accounts expense and depreciation expense.
a. Cost of sales – pertains to the value given on the product sold. Its equivalent for a service business is
direct cost of service.
b. Supplies expense – refers to cost of consumed or used office supplies, store supplies, and shop supplies,
among others.
c. Salaries and wages expense – refers to the total payroll for the employees and workers of the business.
d. Insurance expense – means the amount of premiums paid for insurance policy coverage such as life
insurance company officers and employees, fire insurance, and robbery insurance, among others.
e. Taxes and licenses – refers to cost of permits to operate a business, and income and business taxes paid
to the local government unit, the Register of Deeds, and the Bureau of Internal Revenue, among others.
f. Doubtful accounts expense – represents the estimated amount of customer’s debts to the company,
which are deemed to be uncollectible.
g. Depreciation expense – is the allocated cost of the plant property or equipment to the accounting period.
It is attributed to obsolescence, wear and tear, and passage of time.
The success or failure of a business, in terms of profitability, is shown in the SCI. accounts, revenues, and
expenses are indicators of the net income or loss of the company.

D. Let’s Reinforce Learning.

Essay: Answer the question below and explain briefly.


What do you think must be done concerning revenues and expenses so that a company will gain a net
income?

E. Let’s Evaluate.
The following table includes SFP and SCI elements. Put a check mark ( / ) in the column where each
account belongs.

Account Asset Liability Owner’s Revenue Expense


Equity
Interest Receivable
Professional fees
Service income
Mr. A, Drawing
Doubtful Accounts
Depreciation Expense
Accrued Interest Income
Unearned Interest Income
Prepaid Interest
Accumulated Depreciation
Mortgage Payable
Unused Supplies
Supplies Inventory
Supplies on hand
SSS Premium Expense
Withholding Taxes Payable
Repairs and Maintenance
Petty Cash Fund
Allowance for Bad Debts
Cash in Bank

You might also like