ACC-179 SAS Day-7

ACC 179 | Updates in Management Accounting Part 1
Student Activity Sheet Module #7
Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: ________________________________________ Date: ________________
Lesson Title: Constructive Accounting Materials:

Lesson Objectives:
At the end of this module, the students should be able to:
1. Review single entry bookkeeping systems References:
2. Reconstruct Financial Statements with incomplete records
3. Convert cash basis to accrual accounting
4. Correct errors, analyze and interpret financial statements
Productivity Tip:
“The only thing to do with good advice is to pass it on. It is never of any use to oneself.” - Oscar Wilde
A. LESSON PREVIEW/REVIEW
1) Introduction (2 mins)
Good Day! Hope you are all safe. As we continue our journey on reviewing basic accounting, we will
discuss the processes that happen after the accounting period but prior to the release of the
financial statements.
2) Activity 1: What I Know Chart, part 1 (3 mins)

What I Know Questions: What I Learned (Activity 4)
1. What is Single Entry Bookkeeping?
2. What are common-size financial

statements?
This document is the property of PHINMA EDUCATION


B. MAIN LESSON
1) Activity 2: Content Notes (13 mins)
Single Entry Bookkeeping
Single entry bookkeeping is where a transaction only has to be recorded against one category, either
an income account or an expense account. A cash book is a perfect example of this method of
bookkeeping.
This is in contrast to double entry bookkeeping in which a transaction has to be recorded into two or
more ledger accounts using journals, into debits and credits - and the totals of these have to balance.
Reconstruction of Incomplete Records

You will encounter times when there is incomplete data and records when constructing the financial
statements. But due to the relationships between the accounts, one can find a reasonable estimate on
what the missing accounts are. This is under the assumption that the other accounts are presented
fairly. The relationships between accounts can be written as an equation.
Some of the notable equations are as follows:
• Assets = Liabilities + Equity

• Revenue – Expenses = Income
From these equations, one can draw out the value of an incomplete records based on its relationships
with the other accounts.
Example: Below are the following accounts of Lang Barbershop for the year 2019:
Cash P 15,000
Accounts Receivable 5,000
Supplies 12,000
Barber Equipment 45,000
Accounts Payable 28,000
Loans Payable 36,000
How much is Lang, Capital for the year?
Total Assets = P 15,000 + 5,000 + 12 + 45,000 = P 77,000

Total Liabilities = P 28,000 + 36,000 = P 64,000
Lang, Capital = Assets – Liabilities = P 77,000 – 64,000 = P 13,000


Common-size Financial Statements

Common size financial statements reduce all figures to a comparable figure, such as a percentage of
sales or assets. Each financial statement uses a slightly different convention in standardizing figures.
Example:
Cash 14%
Inventories 18%
Accounts Receivable 23%
Supplies 15%
Equipment 30%
Total Assets 100%
The ledger shows Accounts Receivable balance for the year was P 63,250. How much was the balance
of the equipment for the year?
Total Assets = P 63,250 / 23% = P 275,000

Equipment = P 275,000 * 30% = P 82,500
Converting from Cash Basis to Accrual Basis

Under the cash basis of accounting, business transactions are only recorded when the cash related to
them is either issued or received. Thus, you would record a sale under the cash basis when the
organization receives cash from its customers, not when it issues invoices to them. The cash basis is
commonly used in small businesses, since it requires only a limited amount of accounting expertise.
However, it may be necessary to convert to the accrual basis of accounting, perhaps to have the
company's books audited in preparation for its sale, or to go public, or to obtain a loan. The accrual
basis is used to record revenues and expenses in the period when they are earned, irrespective of
actual cash flows. To convert from cash basis to accrual basis accounting, follow these steps:
• Add accrued expenses

• Subtract cash payments
• Add prepaid expenses
• Add accounts receivable
• Subtract cash receipts
• Subtract customer prepayments


2) Activity 3: Skill-building Activities (with answer key) (18 mins + 2 mins checking)
For the year 2018, Noeme Par Day Care have the following information regarding the accounts in
their financial statements:
• Cash is 10% of Total Assets
• Total Liabilities is twice the amount of cash
• Total non-current Liabilities is P 710,000
• Land is P 140,000 and Equipment has a book value of P 10,000 more than land.
• Land is 17.5% of Total Assets
Solve for the following:

1. Building
2. Owner’s Equity
3. Accounts Receivable
4. Cash
5. Total Assets
3) Activity 4: What I Know Chart, part 2 (2 mins)

It’s time to answer the questions in the “What I Know Chart” in Activity 2. Write your answers in the “What I
Learned” column. Let’s see your improvement!
C. LESSON WRAP-UP
1) Activity 6: Thinking about Learning (5 mins)
Work tracker. Congratulations! You have finished the module for today! Shade the number of the module
that you finished.
First Period Second Period Third Period
1 2 3 4 5 6 7 8 9 1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2
0 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6
How do you feel today?

I feel (unsatisfactory/satisfactory/excellent) because
_______________________________________________________________.
What are your challenges in learning the concepts in this module? If you do not have challenges, what is
your best learning for today?
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
__________________


What are the questions/thoughts you want to share to your teacher today?
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
__________________

ACC-179 SAS Day-7

Uploaded by

Copyright:

Available Formats

ACC-179 SAS Day-7

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

ACC-179 SAS Day-7

Uploaded by

Copyright:

Available Formats

ACC 179 | Updates in Management Accounting Part 1

Student Activity Sheet Module #7

Name: _________________________________________________________________ Class number: _______

Lesson Title: Constructive Accounting Materials:

2) Activity 1: What I Know Chart, part 1 (3 mins)

2. What are common-size financial

This document is the property of PHINMA EDUCATION

Name: _________________________________________________________________ Class number: _______

Reconstruction of Incomplete Records

Some of the notable equations are as follows:

• Assets = Liabilities + Equity

How much is Lang, Capital for the year?

Total Assets = P 15,000 + 5,000 + 12 + 45,000 = P 77,000

This document is the property of PHINMA EDUCATION

Name: _________________________________________________________________ Class number: _______

Common-size Financial Statements

Total Assets = P 63,250 / 23% = P 275,000

Converting from Cash Basis to Accrual Basis

• Add accrued expenses

This document is the property of PHINMA EDUCATION

Name: _________________________________________________________________ Class number: _______

Solve for the following:

3) Activity 4: What I Know Chart, part 2 (2 mins)

How do you feel today?

This document is the property of PHINMA EDUCATION

Name: _________________________________________________________________ Class number: _______

This document is the property of PHINMA EDUCATION

You might also like

Name: ___________________________________________________________ Class number: _

Name: ___________________________________________________________ Class number: _

Name: ___________________________________________________________ Class number: _

Name: ___________________________________________________________ Class number: _

Name: ___________________________________________________________ Class number: _